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1.

SPOUSES DAVID BERGONIA and LUZVIMINDA


CASTILLO,
Petitioners,

- versus –

COURT OF APPEALS (4th DIVISION) and AMADO


BRAVO, JR.,
Respondents.

REYES, J.:

This is a petition for certiorari under Rule 65 of the Rules of Court filed by the spouses David
Bergonia and Luzviminda Castillo (petitioners) assailing the Resolutions issued by the Court of Appeals
(CA) on May 18, 2009[1] and June 29, 2009[2] in CA-G.R. CV No. 91665.

The petitioners were the plaintiffs in Civil Case No. Br. 23-749-03 entitled Spouses David Bergonia and
Luzviminda Castillo v. Amado Bravo, Jr. in the Regional Trial Court (RTC), Branch 23, Roxas, Isabela. On
January 21, 2008, the RTC rendered a decision adverse to the petitioners. The petitioners consequently
sought a reconsideration of the said decision but the same was denied by the RTC in an Order dated April
25, 2008 which was received on May 6, 2008. On May 7, 2008, the petitioners filed a Notice of Appeal.[3]

In January 2009, the Law Firm of Lapea & Associates filed with the CA its formal entry of
appearance as counsel for the petitioners, in view of the withdrawal of the former counsel, Atty. Panfilo
Soriano. The substitution of lawyers was noted in the Resolution [4] dated January 20, 2009. In the same
resolution, the CA further directed the appellants therein to remit the deficient amount of P20.00 within 5
days from notice. Thereafter, the CA issued a Resolution on January 30, 2009 requiring the filing of the
Appellants Brief within 45 days from receipt.

On April 8, 2009, respondent Amado Bravo, Jr. (the defendant-appellee therein), filed a Motion to
Dismiss Appeal[5] dated April 2, 2009 stating that the petitioners failed to file their Appellants Brief within the
45-day period granted to them by the CA in the Resolution dated January 30, 2009. Citing Section 1 (e),
Rule 50 of the Rules of Court, respondent prayed for the dismissal of the petitioners appeal.

In an Opposition/Comment promptly filed on April 8, 2009,[6] the petitioners alleged that the Motion
to Dismiss filed by the respondent had no basis considering that they or their counsel did not receive any
resolution from the CA requiring them to file their Appellants Brief within 45 days.[7]

On May 18, 2009, the CA issued the assailed resolution[8] which reads:

For failure of the plaintiffs-appellants to file the required appellants brief within the
reglementary period which expired on 22 March 2009, as per Judicial Records Division
Report dated 05 May 2009, the appeal is hereby considered ABANDONED and is
hereby DISMISSED pursuant to Section 1 (e), Rule 50, 1997 Rules of Civil Procedure.

SO ORDERED. (citation omitted)

On May 25, 2009, the CA issued a Resolution[9] which stated, among others, that the January 30,
2009 notice to file brief addressed to petitioners counsel was received by a certain Ruel de Tomas on
February 5, 2009.

On June 5, 2009, the petitioners filed a Compliance and Motion for Reconsideration [10] praying that
the dismissal of their appeal be set aside in the interest of justice and equity. The petitioners claimed that
their failure to file their brief was due to the fact that they were never furnished a copy of the said January
30, 2009 Resolution of the CA directing them to file their brief.

Subsequently, in a Manifestation[11] filed on June 16, 2009, the petitioners asserted that their
counsel the Law Firm of Lapea and Associates has no employee in the name of Ruel de Tomas. However,
they explained that Atty. Torenio C. Cabacungan, Jr., an associate of the law firm personally knows a
person named Ruel who sometimes visits their office and who may have accidentally received the said
January 30, 2009 Resolution of the CA. In such a case, the same should not be considered officially served
upon them as the latter was not connected with nor authorized to perform any act for and in behalf of
counsel.

On June 29, 2009, the CA denied the motion for reconsideration. [12]

Undaunted, the petitioners instituted the instant petition for certiorari before this Court asserting the
following arguments: (1) their failure to file their appellants brief was merely due to the fact that they were
never properly served with a copy of the January 30, 2009 Resolution of the CA; (2) Ruel de Tomas, the
person who apparently received the copy of the January 30, 2009 Resolution of the CA, was not their
employee; and (3) the CA, in the interest of justice and equity, should have decided their appeal on the
merits instead of dismissing the same purely on technical grounds.

The sole issue for resolution is the propriety of the dismissal of the petitioners appeal for their failure
to file the appellants brief within the reglementary period.

The petition is denied.

At the outset, this Court notes that the petitioners resort to a petition for certiorari under Rule 65 of
the Rules of Court is not the proper remedy to assail the May 18, 2009 and June 29, 2009 Resolutions
issued by the CA. In determining the appropriate remedy or remedies available, a party aggrieved by a
court order, resolution or decision must first correctly identify the nature of the order, resolution or decision
he intends to assail.[13]

It bears stressing that the extraordinary remedy of certiorari can be availed of only if there is no
appeal or any other plain, speedy, and adequate remedy in the ordinary course of law.[14] On the other
hand, Section 1, Rule 41 of the Rules of Court states that an appeal may be taken from a judgment or final
order that completely disposes of the case or a particular matter therein.

Concomitant to the foregoing, the remedy of a party against an adverse disposition of the CA would
depend on whether the same is a final order or merely an interlocutory order. If the Order or Resolution
issued by the CA is in the nature of a final order, the remedy of the aggrieved party would be to file a petition
for review on certiorari under Rule 45 of the Rules of Court. Otherwise, the appropriate remedy would be
to file a petition for certiorari under Rule 65.

In Republic v. Sandiganbayan (Fourth Division),[15] this Court laid down the following rules to
determine whether a courts disposition is already a final order or merely an interlocutory order and the
respective remedies that may be availed in each case, thus:

Case law has conveniently demarcated the line between a final judgment or order
and an interlocutory one on the basis of the disposition made. A judgment or order is
considered final if the order disposes of the action or proceeding completely, or
terminates a particular stage of the same action; in such case, the remedy available
to an aggrieved party is appeal. If the order or resolution, however, merely resolves
incidental matters and leaves something more to be done to resolve the merits of
the case, the order is interlocutory and the aggrieved partys remedy is a petition
for certiorari under Rule 65. Jurisprudence pointedly holds that:
As distinguished from a final order which disposes of the
subject matter in its entirety or terminates a particular proceeding or
action, leaving nothing else to be done but to enforce by execution
what has been determined by the court, an interlocutory order does
not dispose of a case completely, but leaves something more to be
adjudicated upon. The term final judgment or order signifies a judgment
or an order which disposes of the case as to all the parties, reserving no
further questions or directions for future determination.

On the other hand, a court order is merely interlocutory in


character if it leaves substantial proceedings yet to be had in
connection with the controversy. It does not end the task of the court
in adjudicating the parties contentions and determining their rights
and liabilities as against each other. In this sense, it is
basically provisional in its application. (citations omitted)

Here, the assailed May 18, 2009 and June 29, 2009 Resolutions issued by the CA had considered
the petitioners appeal below as having been abandoned and, accordingly, dismissed. Thus, the assailed
Resolutions are in the nature of a final order as the same completely disposed of the petitioners appeal
with the CA. Thus, the remedy available to the petitioners is to file a petition for review on certiorari under
Rule 45 with this court and not a petition for certiorari under Rule 65.

Even if we are to assume arguendo that the petitioners resort to the extraordinary remedy
of certiorari is proper, the instant petition would still be denied. A petition for certiorari will prosper only if
grave abuse of discretion is alleged and proved to exist.[16] The abuse of discretion must be so patent and
gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law or
to act at all in contemplation of law, as where the power is exercised in an arbitrary and despotic manner
by reason of passion or hostility.[17] Here, there was no hint of whimsicality or gross and patent abuse of
discretion on the part of the CA when it dismissed the appeal of the petitioners for the failure of the latter to
file their appellants brief.

Section 1 (e), Rule 50 of the Rules of Court succinctly provides that:

Section 1. Grounds for dismissal of appeal. An appeal may be dismissed by the


Court of Appeals, on its own motion or on that of the appellee, on the following grounds:

xxxx

(e) Failure of the appellant to serve and file the required number of copies of his
brief or memorandum within the time provided by these Rules; x x x

In a long line of cases, this Court has held that the CAs authority to dismiss an appeal for failure to
file the appellants brief is a matter of judicial discretion. Thus, a dismissal based on this ground is neither
mandatory nor ministerial; the fundamentals of justice and fairness must be observed, bearing in mind the
background and web of circumstances surrounding the case.[18]

Having in mind the peculiar circumstances of the instant case, we find that the petitioners excuse
for their failure to file their brief was flimsy and discreditable and, thus, the propriety of the dismissal of their
appeal. Indeed, as aptly ruled by the CA, the records of the case clearly showed that the petitioners, through
their counsel, received the January 30, 2009 Resolution which required them to file their appellants brief.
Thus:

The records of this case are clear that the Resolution of 30 January 2009 requiring
the [petitioners] to file the required brief was received by a certain Ruel de Tomas for
[petitioners] counsel on 05 February 2009. Hence, mere denial by [petitioners] counsel of
the receipt of his copy of the Resolution cannot be given weight in the absence of any proof
that the said person is neither an employee at his law office nor someone unknown to him.
Likewise, it is highly implausible that any person in the building where [petitioners] counsel
holds office would simply receive a correspondence delivered by a postman. [19]

Verily, the petitioners were only able to offer their bare assertion that they and their counsel did not
actually receive a copy of the January 30, 2009 Resolution and that the person who apparently received
the same was not in any way connected with their counsel. There was no other credible evidence adduced
by the petitioners which would persuade us to exculpate them from the effects of their failure to file their
brief.

The Court notes that, in concluding that the petitioners indeed received a copy of the January 30,
2009 Resolution, the CA was guided by the Report of the Judicial Records Division of the CA and by the
certification issued by the Postmaster of Quezon City. Indubitably, the petitioners bare assertions could not
overcome the presumption of regularity in the preparation of the records of the Post Office and that of the
CA.[20]

Nonetheless, the petitioners cite a cacophony of cases decided by this Court which, in essence,
declared that dismissal of an appeal on purely technical ground is frowned upon and that, as much as
possible, appeals ought to be decided on the merits in the interest of justice and equity.

The petitioners' plea for the application of the principles of substantial justice in their favor deserves
scant consideration. The petitioners should be reminded that technical rules may be relaxed only for the
furtherance of justice and to benefit the deserving.[21] While the petitioners adverted to several
jurisprudential rulings of this Court which set aside procedural rules, it is noted that there were underlying
considerations in those cases which warranted a disregard of procedural technicalities to favor substantial
justice. Here, there exists no such consideration.

The petitioners ought to be reminded that the bare invocation of "the interest of substantial justice"
is not a magic wand that will automatically compel this Court to suspend procedural rules. Procedural rules
are not to be belittled or dismissed simply because their non-observance may have resulted in prejudice to
a party's substantive rights. Like all rules, they are required to be followed except only for the most
persuasive of reasons when they may be relaxed to relieve a litigant of an injustice not commensurate with
the degree of his thoughtlessness in not complying with the procedure prescribed. [22]

In Asian Spirit Airlines v. Spouses Bautista,[23] this Court clarified that procedural rules are required
to be followed except only for the most persuasive of reasons when they may be relaxed to relieve a litigant
of an injustice not commensurate with the degree of his thoughtlessness in not complying with the
procedure prescribed:

We agree with the petitioners contention that the rules of procedure may be
relaxed for the most persuasive reasons. But as this Court held in Galang v. Court of
Appeals:

Procedural rules are not to be belittled or dismissed simply


because their non-observance may have resulted in prejudice to a partys
substantive rights. Like all rules, they are required to be followed except
only for the most persuasive of reasons when they may be relaxed to
relieve a litigant of an injustice not commensurate with the degree of his
thoughtlessness in not complying with the procedure prescribed.

In an avuncular case, we emphasized that:

Procedural rules are tools designed to facilitate the adjudication of


cases. Courts and litigants alike are, thus, enjoined to abide strictly by the
rules. And while the Court, in some instances, allows a relaxation in the
application of the rules, this, we stress, was never intended to forge a
bastion for erring litigants to violate the rules with impunity. The liberality
in the interpretation and application of the rules applies only in proper
cases and under justifiable causes and circumstances. While it is true that
litigation is not a game of technicalities, it is equally true that every case
must be prosecuted in accordance with the prescribed procedure to insure
an orderly and speedy administration of justice. The instant case is no
exception to this rule.

In the present case, we find no cogent reason to exempt the petitioner from the
effects of its failure to comply with the Rules of Court.

The right to appeal is a statutory right and the party who seeks to avail of the same
must comply with the requirements of the Rules. Failing to do so, the right to appeal is lost.
More so, as in this case, where petitioner not only neglected to file its brief within the
stipulated time but also failed to seek an extension of time for a cogent ground before the
expiration of the time sought to be extended.

In not a few instances, the Court relaxed the rigid application of the rules of
procedure to afford the parties the opportunity to fully ventilate their cases on the merits.
This is in line with the time-honored principle that cases should be decided only after giving
all parties the chance to argue their causes and defenses. Technicality and procedural
imperfection should, thus, not serve as basis of decisions. In that way, the ends of justice
would be better served. For, indeed, the general objective of procedure is to facilitate the
application of justice to the rival claims of contending parties, bearing always in mind that
procedure is not to hinder but to promote the administration of justice. In this case,
however, such liberality in the application of rules of procedure may not be invoked if it will
result in the wanton disregard of the rules or cause needless delay in the administration of
justice. It is equally settled that, save for the most persuasive of reasons, strict compliance
is enjoined to facilitate the orderly administration of justice.[24](citations omitted)

Reiterating the foregoing in Dimarucot v. People of the Philippines,[25] this Court stated that:

The right to appeal is not a natural right and is not part of due process. It is merely
a statutory privilege, and may be exercised only in accordance with the law. The party who
seeks to avail of the same must comply with the requirements of the Rules. Failing to do
so, the right to appeal is lost.

Strict compliance with the Rules of Court is indispensable for the orderly and
speedy disposition of justice. The Rules must be followed, otherwise, they will become
meaningless and useless.[26] (citations omitted)

WHEREFORE, in consideration of the foregoing disquisitions, the petition is DISMISSED. The


assailed Resolutions dated May 18, 2009 and June 29, 2009 issued by the Court of Appeals in CA-G.R.
CV No. 91665 dismissing the petitioners appeal are AFFIRMED.

2. JAIME TAN, JR., as Judicial Administrator of the Intestate Estate of Jaime C. Tan, petitioner,
vs. HON. COURT OF APPEALS (Ninth Special Div.) and JOSE A. MAGDANGAL and ESTRELLA
MAGDANGAL, respondents.

DECISION
PUNO, J.:
This is a petition for review of the Decision of the Court of Appeals dated July 15, 1998[1]and its
Resolution dated November 9, 1998[2]denying petitioners motion for reconsideration in CA-G.R. SP-41738.
The facts are as stated in the impugned Decision, viz:

Involved in this case is a parcel of land, designated as Lot No. 645-C, with an area of 34,829 square meters,
more or less, situated in Bunawan, Davao City. The lot was once covered by TCT No. T-72067 of the
Registry of Deeds of Davao City in the name of the late Jaime C. Tan (Tan, for short) married
to Praxedes V. Tan.

From the petition, the motion to dismiss petition, their respective annexes and other pleadings, we gather
the following factual antecedents:

On January 22, 1981, Tan, for a consideration of P59,200.00, executed a deed of absolute sale over the
property in question in favor of spouses Jose Magdangal and Estrella Magdangal. Simultaneous with the
execution of this deed, the same contracting parties entered into another agreement whereunder Tan was
given one (1) year within which to redeem or repurchase the property.

Albeit given several opportunities and/or extensions to exercise the option, Tan failed to redeem the
property until his death on January 4, 1988.

On May 2, 1988, Tans heirs filed before the Regional Trial Court at Davao City a suit against
the Magdangals for reformation of instrument. Docketed as CIVIL CASE NO. 19049-88, the complaint
alleged that, while Tan and the Magdangals denominated their agreement as deed of absolute sale, their
real intention was to conclude an equitable mortgage.

Barely hours after the complaint was stamped received, the Magdangals were able to have Tans title over
the lot in question canceled and to secure in their names TCT No. T-134470. This development prompted
the heirs of Tan, who were to be later substituted by Jaime V. Tan, Jr. (Tan, Jr.) as plaintiff, to file a
supplemental complaint.

The intervening legal tussles are not essential to this narration. What is material is that on June 4, 1991,
Branch 11 of the Regional Trial Court of Davao City rendered judgment finding for Tan, Jr., as plaintiff
therein. The dispositive portion of the decision reads:.

WHEREFORE, judgment is rendered:

1. The Deed of Absolute Sale (Exhibits B, B-1) is, in accordance with the true intention of the parties, hereby
declared and reformed an equitable mortgage;

2. The plaintiff is ordered to pay the defendants within 120 days after the finality of this
decision P59,200 plus interest at the rate of 12% per annum from May 2, 1988, the date the complaint was
filed, until paid;

3. In order to avoid multiplicity of suits and to fully give effect to the true intention of the parties, upon the
payment of the aforesaid amount, TCT No. T-134470 in the name of defendants
Jose Magdangal and Estrella Magdangal (Exh. 13) and shall be deemed canceled and null and
void and TCT No. T-72067 in the name of Jaime C. Tan and Praxedes Valles Tan (Exh. A) bereinstated.

No pronouncement as to costs.

SO ORDERED. (Annex B, Petition; Emphasis added).

From the above, the Magdangals appealed to this Court in CA-G.R. CV No. 33657.
In a decision promulgated on September 28, 1995, this Court, thru its then Special Third Division,
affirmed in toto the appealed decision of the lower court. Copy of this affirmatory judgment was each
received by the Magdangals and Tan, Jr. on October 5, 1995.

On March 13, 1996, the Clerk of this Court entered in the Book of Entries of Judgment the Decision in CA-
G.R. CV No. 33657 and issued the corresponding Entry of Judgment which, on its face, stated that the said
Decision has on October 21, 1995 become final and executory (Annex L, Petition; Emphasis added).

On March 21, 1996, the Magdangals filed in the lower court a MOTION FOR CONSOLIDATION AND WRIT
OF POSSESSION, therein alleging that they did not appeal from the aforesaid decision of this
Court, adding [T]hat the appealed judgment of the Court of Appeals has become final and executory 15
days from October 5, 1995 or up to October 20, 1995, which the 120 days redemption period
commences. And noting that the redemption period has expired without Tan, Jr. exercising his option,
the Magdangals thus prayed that the title in the name of Jaime C. Tan and Praxedes Tan be consolidated
and confirmed in the name of the (Magdangals) x x x and pending such issuance, a writ of possession be
ordered issued (Annex C, Petition).

In opposition to this motion (Annex F, Petition), Tan, Jr. alleged, among other things, that until an entry of
judgment has been issued by the Court of Appeals and copy thereof furnished the parties, the
appealed decision of the court a quo in this case cannot be considered final and executory. Pressing the
point, Tan, Jr., citing Cueto vs. Collantes, infra., would then assert that the period of redemption on his part
commenced to run from receipt of entry of judgment in CA-G.R. CV No. 33657.

Meanwhile, Tan, Jr. via a motion for execution dated March 27, 1996, which he filed directly with this court,
prayed this court to direct the court a quo to issue the corresponding writ of execution in Civil Case No.
19049-88. In a related move, Tan, Jr. filed on April 16, 1996, a MANIFESTATION AND MOTION therein
advising the court a quo of his intention to redeem the property in question and of the fact that, on such
date, he has deposited with its clerk of court the repurchase price, plus interest, as required by its
original decision. By way of relief, Tan, Jr. prayed that the Magdangals be ordered to claim the amount thus
deposited and the Register of Deeds of Davao City, to reinstate the title of Jaime Tan and Praxedes Tan.

Jointly acting on the aforementioned MOTION FOR CONSOLIDATION AND WRIT OF POSSESSION of
the Magdangals (Annex C, Petition), MANIFESTATION AND MOTION of Tan, Jr. (Annex I, Petition), the
court a quo presided by the respondent judge, came out with the first challenged order of June 10, 1996
(Annex N, Petition), dispositively reading, as follows:

WHEREFORE, x x x the Motion for Consolidation and a Writ of Possession is hereby DENIED for lack of
merit.

The deposit of the amount of P116,032.00 made by plaintiff with the Office of the Clerk of Court x x x on
April 17, 1996 is hereby considered full payment of the redemption price and the Clerk of Court is hereby
ordered to deliver said amount to herein defendants.

The Register of Deeds of Davao City x x x is hereby directed to cancel TCT No. T-134470 in the name of
Jose Magdangal and Estrella Magdangal and, thereafter, to reinstate TCT No. 72067 in the name of Jaime
C. Tan and Praxedes Valles Tan and to submit her compliance thereto within ten (10) days from receipt of
this Order.

SO ORDERED.
Explaining her action, the respondent judge wrote in the same order:

Following the ruling of the Supreme Court in Cueto vs. Collantes, et al., 97 Phil. 325, the 120 days period
for plaintiff to pay the amount of P59,200.00 plus interest x x x should be reckoned from the date of Entry
of Judgment x x x which was March 13, 1996. The plaintiff made a deposit on April 17, 1996 well within the
120-day period mandated by the decision of this Court.

In due time, the Magdangals moved for a reconsideration. However, in her next assailed order of July 24,
1996 (Annex R, Petition), the respondent judge denied the motion for being pro-forma and fatally
defective.[3]
Petitioner assails the aforequoted Decision as follows:
I. Petitioners right to due process was violated when the Court of Appeals rendered a judgment
on the merits of private respondents petition without granting to petitioner the opportunity to
controvert the same.
II. Appeal not certiorari was the appropriate remedy of private respondents as there was no grave
abuse of discretion as to amount to lack of or excess of jurisdiction on the part of the trial
judge. Neither is delay in resolving the main case a ground for giving due course to the petition.
III. Cueto vs. Collantes, 97 Phil. 325, was disregarded by the Court of Appeals in resolving the
petition of private respondents. It is still good case law and was in effect made a part of section
2 of Rule 68 of the 1997 Rules of Civil Procedure on Foreclosure of Mortgage.
IV. The St. Dominic vs. Intermediate Appellate Court, 138 SCRA 242 case is not applicable to the
case at bar; on the other hand the ruling in Gutierrez Hermanos vs. de La Riva, 46 Phil. 827,
applies.
V. Equity considerations justify giving due course to this petition.[4](emphasis ours)
We will immediately resolve the key issue of what rule should govern the finality of judgment favorably
obtained in the trial court by the petitioner.
The operative facts show that in its Decision of June 4, 1991, the trial court held that: (1) the contract
between the parties is not an absolute sale but an equitable mortgage; and (2) petitioner Tan should pay
to the respondents Magdangal within 120 days after the finality of this decision P59,200.00 plus interest at
the rate of 12% per annum from May 2, 1988, the date the complaint was filed, until paid. [5]
On September 28, 1995 in CA-G.R. CV No. 33657, the Special Third Division of the Court of Appeals
affirmed the decision of the trial court in toto. Both parties received the decision of the appellate court
on October 5, 1995. On March 13, 1996, the clerk of court of the appellate court entered in the Book of
Entries of Judgement the decision in CA-G.R. CV No. 33657 and issued the corresponding Entry of
Judgment which, on its face, stated that the said decision has on October 21, 1995 become final
and executory.[6]
The respondents Magdangal filed in the trial court a Motion for Consolidation and Writ
of Possession.[7]They alleged that the 120-day period of redemption of the petitioner has expired. They
reckoned that the said period began 15 days after October 5, 1995, the date when the finality of the
judgment of the trial court as affirmed by the appellate court commenced to run.
On the other hand, petitioner filed on March 27, 1996 a motion for execution in the appellate court
praying that it direct the court a quo to issue the corresponding writ of execution in Civil Case No. 19049-
88.[8]On April 17, 1996, petitioner deposited with the clerk of court the repurchase price of the lot plus
interest as ordered by the decision.
On June 10, 1996, the trial court allowed the petitioner to redeem the lot in question. It ruled that the
120-day redemption period should be reckoned from the date of Entry of Judgment in the appellate court
or from March 13, 1996.[9]The redemption price was deposited on April 17, 1996. As aforestated, the Court
of Appeals set aside the ruling of the trial court.
From 1991-1996, the years relevant to the case at bar, the rule that governs finality of judgment is
Rule 51 of the Revised Rules of Court. Its sections 10 and 11 provide:
SEC. 10. Entry of judgments and final resolutions. If no appeal or motion for new trial or reconsideration is
filed within the time provided in these Rules, the judgment or final resolution shall forthwith be entered by
the clerk in the book of entries of judgments. The date when the judgment or final resolution
becomes executory shall be deemed as the date of its entry. The record shall contain the dispositive part
of the judgment or final resolution and shall be signed by the clerk, with a certificate that such judgment or
final resolution has become final and executory.(2a, R36)

SEC. 11. Execution of judgment. Except where the judgment or final order or resolution, or a portion thereof,
is ordered to be immediately executory, the motion for its execution may only be filed in the proper court
after its entry.
In original actions in the Court of Appeals, its writ of execution shall be accompanied by a certified true
copy of the entry of judgment or final resolution and addressed to any appropriate officer for its enforcement.
In appealed cases, where the motion for execution pending appeal is filed in the Court of Appeals at
a time that it is in possession of the original record or the record on appeal, the resolution granting such
motion shall be transmitted to the lower court from which the case originated, together with a certified true
copy of the judgment or final order to be executed, with a directive for such court of origin to issue the
proper writ for its enforcement.
This rule has been interpreted by this Court in Cueto vs. Collantes as follows:[10]

The only error assigned by appellants refer to the finding of the lower court that plaintiff can still exercise
his right of redemption notwithstanding the expiration of the 90-day period fixed in the original decision and,
therefore, defendants should execute the deed of reconveyance required in said decision. Appellants
contend that, the final judgment of the Court of Appeals having been entered on July 8, 1953, the 90-day
period for the exercise of the right of redemption has long expired, it appearing that plaintiff deposited the
redemption money with the clerk of court only on October 17, 1953, or, after the expiration of 101
days. Appellee brands this computation as erroneous, or one not in accordance with the procedure
prescribed by the rules of court.

Appellees contention should be sustained. The original decision provides that appellee may exercise his
right of redemption within the period of 90 days from the date the judgment has become final. It should be
noted that appellee had appealed from this decision. This decision was affirmed by the court of appeals
and final judgment was entered on July 8, 1953. Does this mean that the judgment became final on that
date?

Let us make a little digression for purposes of clarification. Once a decision is rendered by the Court of
Appeals a party may appeal therefrom by certiorari by filing with the Supreme Court a petition within 10
days from the date of entry of such decision (Section 1, Rule 46). The entry of judgment is made after it
has become final, i.e., upon the expiration of 15 days after notice thereof to the parties (Section 8, Rule 53,
as modified by a resolution of the Supreme Court dated October 1, 1945). But, as Chief Justice Moran has
said, such finality *** is subject to the aggrieved partys right of filing a petition for certiorari under this
section, which means that the Court of Appeals shall remand the case to the lower court for the execution
of its judgment, only after the expiration of ten (10) days from the date of such judgment, if no petition for
certiorari is filed within that period. (1 Moran, Comments on the Rules of Court, 1952 ed., p. 950) It would
therefore appear that the date of entry of judgment of the Court of Appeals is suspended when a
petition for review is filed to await the final entry of the resolution or decision of the Supreme Court.

Since in the present case appellee has filed a petition for review within the reglementary period, which was
dismissed by resolution of July 6, 1953, and for lack of a motion for reconsideration the entry of final
judgment was made on August 7, 1953, it follows that the 90-day period within which appellee may
exercise his right of redemption should be counted from said date, August 7, 1953. And appellee having
exercised such right on October 17, 1953 by depositing the redemption money with the clerk of court, it is
likewise clear that the motion be filed for the exercise of such right is well taken and is within the purview
of the decision of the lower court.[11]
On April 18, 1994, this Court issued Circular No. 24-94, viz:
TO: COURT OF APPEALS, SANDIGANBAYAN, COURT OF TAX APPEALS, REGIONAL TRIAL
COURTS, METROPOLITAN TRIAL COURTS, MUNICIPAL TRIAL COURTS, MUNICIPAL
CIRCUIT TRIAL COURTS, AND ALL MEMBERS OF THE INTEGRATED BAR OF THE
PHILIPPINES
SUBJECT: RESOLUTION OF THE COURT EN BANC APPROVING AND PROMULGATING
THE REVISED PROVISION ON EXECUTION OF JUDGMENTS, SPECIFICALLY IN
APPEALED CASES, AND AMENDING SECTION 1, RULE 39 OF THE RULES OF COURT

It appears that in a number of instances, the execution of judgments in appealed cases cannot be promptly
enforced because of undue administrative delay in the remand of the records to the court of origin,
aggravated at times by misplacement or misdelivery of said records. The Supreme Court Committee on the
Revision of the Rules of Court has drafted proposals including a provision which can remedy the procedural
impasse created by said contingencies.

Accordingly, pending approval by the Court of the revised rules on Civil Procedure, and to provide a solution
to the aforestated problems, the Court Resolved to approve and promulgate the following section thereof
on execution of judgments, amending Section 1, Rule 39 of the Rules of Court:

Section 1. Execution upon judgments or final orders. Execution shall issue as a matter of right, on motion,
upon a judgment or order that disposes of the action or proceeding upon expiration of the period to
appeal therefrom if no appeal has been duly perfected.

If the appeal has been duly perfected and finally resolved, such execution may forthwith be applied for in
the lower court from which the action originated, on motion of the judgment obligee, submitting therewith
certified true copies of the judgment or judgments or the final order or orders sought to be enforced and of
the entry thereof, with notice to the adverse party.

The appellate court may, on motion in the same case, when the interest of justice so requires, direct the
court of origin to issue the writ of execution.

This resolution shall be published in two (2) newspapers of general circulation and shall take effect on June
1, 1994.

April 18, 1994.

(Sgd.) ANDRES R. NARVASA

Chief Justice

The Circular took effect on June 1, 1994.


The 1997 Revised Rules of Civil Procedure, however, amended the rule on finality of judgment by
providing in section 1, Rule 39 as follows:

Section 1. Execution upon judgments or final orders. Execution shall issue as a matter of right, on motion,
upon a judgment or order that disposes of the action or proceeding upon the expiration of the period to
appeal therefrom if no appeal has been duly perfected. (1a)

If the appeal has been duly perfected and finally resolved, the execution may forthwith be applied for in the
court of origin, on motion of the judgment obligee, submitting therewith certified true copies of the judgment
or judgments or final order or orders sought to be enforced and of the entry thereof, with notice to the
adverse party.

The appellate court may, on motion in the same case, when the interest of justice so requires, direct the
court of origin to issue the writ of execution.
The rationale of the new rule is explained by retired Justice F.D. Regalado as follows:[12]

1. The term final order is used in two senses depending on whether it is used on the issue of appealability or
on the issue of binding effect. For purposes of appeal, an order is final if it disposes of the action, as
distinguished from an interlocutory order which leaves something to be done in the trial court with respect
to the merits of the case (De la Cruz, et al. vs. Paras, et al., L-41053, Feb. 27, 1976). For purposes of
binding effect or whether it can be subject of execution, an order is final or executory after the lapse of
the reglementary period to appeal and no appeal has been perfected (see Perez, et al. vs. Zulueta, L-
10374, Sept. 30, 1959; cf. Denso [Phil.], Inc. vs. IAC, et al., G.R. No. 75000, Feb. 27, 1987; Montilla vs.
CA, et al., L-47968, May 9, 1988).

2. On the aspect of appealability, these revised Rules use the adjective final with respect to orders and
resolutions, since to terminate a case the trial courts issue orders while the appellate courts and most of
the quasi-judicial agencies issue resolutions. Judgments are not so qualified since the use of the so-called
interlocutory judgments is not favored in this jurisdiction, while the categorization of an order or a resolution
for purposes of denoting that it is appealable is to distinguish them from interlocutory orders or
resolutions. However, by force of extended usage the phrase final and executory judgment is sometimes
used and tolerated, although the use of executory alone would suffice. These observations also apply to
the several and separate judgments contemplated in Rule 36, or partial judgments which totally dispose of
a particular claim or severable part of the case, subject to the power of the court to suspend or defer action
on an appeal from or further proceedings in such special judgment, or as provided by Rule 35 on the matter
of partial summary judgments which are not considered as appealable (see Sec. 4, Rule 35 and the
explanation therein).

The second paragraph of this section is an innovation in response to complaints over the delay caused by
the former procedure in obtaining a writ of execution of a judgment, which has already been affirmed on
appeal, with notice to the parties. As things then stood, after the entry of judgment in the appellate court,
the prevailing party had to wait for the records of the case to be remanded to the court of origin when and
where he could then move for the issuance of a writ of execution. The intervening time could sometimes
be substantial, especially if the court a quo is in a remote province, and could also be availed of by the
losing party to delay or thwart actual execution.

On these considerations, the Supreme Court issued Circular No. 24-94, dated April 18, 1994, approving
and promulgating in advance this amended Section 1 of Rule 39 and declaring the same effective as of June
1, 1994.

Under the present procedure, the prevailing party can secure certified true copies of the judgment or final
order of the appellate court and the entry thereof, and submit the same to the court of origin with and to
justify his motion for a writ of execution, without waiting for its receipt of the records from the appellate
court. That motion must be with notice to the adverse party, with a hearing when the circumstances so
require, to enable him to file any objection thereto or bring to the attention of said court matters which may
have transpired during the pendency of the appeal and which may have a bearing on the execution sought
to enforce the judgment.

The third paragraph of this section, likewise a new provision, is due to the experience of the appellate courts
wherein the trial court, for reasons of its own or other unjustifiable circumstances, unduly delays or
unreasonably refuses to act on the motion for execution or issue the writ therefor. On motion in the same
case while the records are still with the appellate court, or even after the same have been remanded to the
lower court, the appellate court can direct the issuance of the writ of execution since such act is merely in
the enforcement of its judgment and which it has the power to require.
It is evident that if we apply the old rule on finality of judgment, petitioner redeemed the subject property
within the 120-day period of redemption reckoned from the appellate courts entry of judgment. The
appellate court, however, did not apply the old rule but the 1997 Revised Rules of Civil Procedure. In fine,
it applied the new rule retroactively and we hold that given the facts of the case at bar this is an error.
There is no dispute that rules of procedure can be given retroactive effect. This general rule, however,
has well-delineated exceptions. We quote author Agpalo:[13]

9.17. Procedural laws.

Procedural laws are adjective laws which prescribe rules and forms of procedure of enforcing rights or
obtaining redress for their invasion; they refer to rules of procedure by which courts applying laws of all
kinds can properly administer justice. They include rules of pleadings, practice and evidence. As applied to
criminal law, they provide or regulate the steps by which one who commits a crime is to be punished.

The general rule that statutes are prospective and not retroactive does not ordinarily apply to procedural
laws. It has been held that a retroactive law, in a legal sense, is one which takes away or impairs vested
rights acquired under laws, or creates a new obligation and imposes a new duty, or attaches a new
disability, in respect of transactions or considerations already past. Hence, remedial statutes or statutes
relating to remedies or modes of procedure, which do not create new or take away vested rights, but only
operate in furtherance of the remedy or confirmation of rights already existing, do not come within the legal
conception of a retroactive law, or the general rule against the retroactive operation of statutes. The general
rule against giving statutes retroactive operation whose effect is to impair the obligations of contract or to
disturb vested rights does not prevent the application of statutes to proceedings pending at the time of their
enactment where they neither create new nor take away vested rights. A new statute which deals with
procedure only is presumptively applicable to all actions those which have accrued or are pending.

Statutes regulating the procedure of the courts will be construed as applicable to actions pending and
undetermined at the time of their passage. Procedural laws are retroactive in that sense and to that
extent. The fact that procedural statutes may somehow affect the litigants rights may not preclude their
retroactive application to pending actions. The retroactive application of procedural laws is not violative of
any right of a person who may feel that he is adversely affected. Nor is the retroactive application of
procedural statutes constitutionally objectionable. The reason is that as a general rule no vested right may
attach to, nor arise from, procedural laws. It has been held that a person has no vested right in any particular
remedy, and a litigant cannot insist on the application to the trial of his case, whether civil or criminal, of
any other than the existing rules of procedure.

Thus, the provision of Batas Bilang 129 in Section 39 thereof prescribing that no record on appeal shall be
required to take an appeal is procedural in nature and should therefore be applied retroactively to pending
actions. Hence, the question as to whether an appeal from an adverse judgment should be dismissed for
failure of appellant to file a record on appeal within thirty days as required under the old rules, which
question is pending resolution at the time Batas Bilang 129 took effect, became academic upon
the effectivity of said law because the law no longer requires the filing of a record on appeal and its
retroactive application removed the legal obstacle to giving due course to the appeal. A statute which
transfers the jurisdiction to try certain cases from a court to a quasi-judicial tribunal is a remedial statute
that is applicable to claims that accrued before its enactment but formulated and filed after it took effect, for
it does not create new nor take away vested rights. The court that has jurisdiction over a claim at the time
it accrued cannot validly try the claim where at the time the claim is formulated and filed the jurisdiction to
try it has been transferred by law to a quasi-judicial tribunal, for even actions pending in one court may be
validly taken away and transferred to another and no litigant can acquire a vested right to be heard by one
particular court.
9.18. Exceptions to the rule.

The rule that procedural laws are applicable to pending actions or proceedings admits certain
exceptions. The rule does not apply where the statute itself expressly or by necessary implication provides
that pending actions are excepted from its operation, or where to apply it to pending proceedings would
impair vested rights. Under appropriate circumstances, courts may deny the retroactive application of
procedural laws in the event that to do so would not be feasible or would work injustice. Nor may procedural
laws be applied retroactively to pending actions if to do so would involve intricate problems of due process
or impair the independence of the courts.
We hold that section 1, Rule 39 of the 1997 Revised Rules of Procedure should not be given
retroactive effect in this case as it would result in great injustice to the petitioner. Undoubtedly, petitioner
has the right to redeem the subject lot and this right is a substantive right. Petitioner followed the procedural
rule then existing as well as the decisions of this Court governing the reckoning date of the period of
redemption when he redeemed the subject lot. Unfortunately for petitioner, the rule was changed by the
1997 Revised Rules of Procedure which if applied retroactively would result in his losing the right to redeem
the subject lot. It is difficult to reconcile the retroactive application of this procedural rule with the rule of
fairness. Petitioner cannot be penalized with the loss of the subject lot when he faithfully followed the laws
and the rule on the period of redemption when he made the redemption. The subject lot may only be 34,829
square meters but as petitioner claims, it is the only property left behind by their father, aprivate law
practitioner who was felled by an assassins bullet.[14]
Petitioner fought to recover this lot from 1988. To lose it because of a change of procedure on the date
of reckoning of the period of redemption is inequitous. The manner of exercising the right cannot be
changed and the change applied retroactively if to do so will defeat the right of redemption of the petitioner
which is already vested.
IN VIEW WHEREOF, the decision of the Court of Appeals dated July 15, 1998 and
its Resolution dated November 9, 1998 in CA-G.R. SP-41738 are annulled and set aside. The Orders
dated June 10, 1996 and July 24, 1996 of the RTC of Davao City, 11th Judicial Region, Branch 11, in Civil
Case No. 19049-88 are reinstated. No costs.

3. BANK OF THE PHILIPPINE ISLANDS,


Petitioner,

- versus -

HON. COURT OF APPEALS, HON. ROMEO


BARZA, in his capacity as the Presiding
Judge of the Regional Trial Court of Makati
City, Br. 61, FIRST UNION GROUP
ENTERPRISES and LINDA WU HU,
Respondents.

BRION, J.:

Through the present petition for review on certiorari,[1] petitioner Bank of the Philippine Islands
(BPI) seeks the reversal of: (1) the Court of Appeals (CA) decision of November 2, 2004,[2] in Bank of the
Philippine Islands v. Hon. Romeo Barza, et al. docketed as CA-G.R. SP No. 75350 and (2) the CA resolution
of May 25, 2005[3] denying BPIs Motion for Reconsideration. The assailed CA ruling affirmed the Order of
the Regional Trial Court (RTC) of Makati City, Branch 61 dated August 26, 2002,[4] granting First Union
Group Enterprises (First Union) and Linda Wu Hus (Linda) Motion to Dismiss dated March 26, 2002. A
subsequent Motion for Reconsideration was likewise denied.[5]

THE FACTUAL ANTECEDENTS


First Union borrowed from BPI the sums of Five Million Pesos (PhP5,000,000.00) and One Hundred Twenty
Thousand U.S. Dollars and 32 cents (USD123,218.32), evidenced by separate promissory notes.[6]
As partial security for the loan obligations of First Union, defendant Linda and her spouse (Eddy Tien)
executed a Real Estate Mortgage Agreement dated August 29, 1997,[7] covering two (2) condominium
units. Linda executed a Comprehensive Surety Agreement dated April 14, 1997 [8] where she agreed to be
solidarily liable with First Union for its obligations to BPI.

Despite repeated demands to satisfy the loan obligations upon maturity, First Union failed to pay BPI the
amounts due.

On October 16, 2000, BPI initiated with the Office of the Sheriff of the RTC of Pasig extra-judicial foreclosure
proceedings against the two (2) mortgaged condominium units to satisfy First Union and Lindas solidary
obligations.

After due notice and publication, the properties were sold at public auction on June 29, 2001.[9] BPI was the
highest bidder, having submitted a bid of Five Million Seven Hundred Ninety Eight Thousand Four Hundred
Pesos (PhP5,798,400.00). The proceeds of the auction sale were applied to the costs and expenses of
foreclosure, and thereafter, to First Unions obligation of Five Million Peso (PhP5,000,000.00). After so
applying the proceeds, First Union still owed BPI a balance of Four Million Seven Hundred Forty Two
Thousand Nine Hundred Forty Nine & 32/100 Pesos (PhP4,742,949.32), inclusive of interests and penalty
charges, as of December 21, 2001.[10] Additionally, First Unions foreign currency loan obligation remained
unpaid and, as of December 21, 2001, amounted to One Hundred Seventy Five Thousand Three Hundred
Twenty Four Thousand & 35/100 US Dollars (USD175,324.35), inclusive of interest and penalty charges.

The Complaint for Collection


of Sum of Money

First Unions and Lindas continued failure to settle their outstanding obligations prompted BPI to file, on
January 3, 2002, a complaint for collection of sum of money with the RTC of Makati City, Branch 61.[11] The
complaints verification and certificate of non-forum shopping were signed by Ma. Cristina F. Asis (Asis) and
Kristine L. Ong (Ong). However, no Secretarys Certificate or Board Resolution was attached to
evidence Asis and Ongs authority to file the complaint.

On April 1, 2002, First Union and Linda filed a motion to dismiss [12] on the ground that BPI violated Rule 7,
Section 5 of the Rules of Civil Procedure (Rules); BPI failed to attach to the complaint the necessary board
resolution authorizing Asis and Ong to institute the collection action against First Union and Linda.[13]

On August 7, 2002, BPI filed an Opposition to the Motion to Dismiss,[14] arguing that the verification and
certificate of non-forum shopping sufficiently established Asis and Ongs authority to file the complaint and
proof of their authority could be presented during the trial. Further, BPI alleged that a complaint can only be
dismissed under Section 5, Rule 7 of the 1997 Rules of Civil Procedure if there was no certification against
forum shopping. The provision, according to BPI, does not even require that the person certifying should
show proof of his authority to do so.[15]

Instead of submitting a board resolution, BPI attached a Special Power of Attorney (SPA) dated December
20, 2001 executed by Zosimo A. Kabigting (Zosimo), Vice-President of BPI.[16] The SPA authorized Asis
and Ong or any lawyer from the Benedicto Versoza Gealogo and Burkley Law Offices to initiate any legal
action against First Union and Linda.

In their Comment[17] to BPIs Opposition, First Union and Linda challenged BPIs reading of the law,
charging that it lacked jurisprudential support.[18] First Union and Linda argued, invoking Public Estates
Authority v. Elpidio Uy,[19] that an initiatory pleading which does not contain a board resolution authorizing
the person to show proof of his authority is equally guilty (sic) of not satisfying the requirements in the
Certification against Non-Forum Shopping. It is as if though (sic) no certification has been filed.[20] Thus,
according to First Union and Linda, BPIs failure to attach a board resolution shall not be curable by mere
amendment of the complaint or other initiatory pleading but shall be cause for dismissal of the case without
prejudice x x x.[21] First Union and Linda likewise questioned the belated submission of the SPA, which in
any case, is not the board resolution envisioned by the rules since the plaintiff herein is a juridical person. [22]

BPIs Reply[23] to the Comment argued that the cited Public Estates Authority case is not
authoritative since what is proscribed is the absence of authority from the board of directors, not the failure
to attach the board resolution to the initiatory pleading.[24] BPI contended that the primary consideration is
whether Asis and Ong were authorized by BPI, not the failure to attach the proof of authority to the
complaint.[25] BPI also begged the kind indulgence of the Honorable Court as it inadvertently failed to
submit with the Special Power of Attorney the Corporate Secretarys Certificate which authorized Mr. Zosimo
Kabigting to appoint his substitutes.[26]

On August 22, 2002, the RTC issued its assailed Order [27] granting First Unions and Lindas Motion to
Dismiss.[28] The trial court denied BPIs Motion for Reconsideration[29] on November 13, 2002.[30]

Proceedings before the CA

BPI, on February 5, 2003, filed a petition for certiorari[31] under Rule 65 of the Rules of Court before the
CA. It alleged that that lower court acted with grave abuse of discretion amounting to lack or excess of
jurisdiction in dismissing the complaint despite the submission of the SPA and the Corporate Secretarys
Certificate.[32]

In their Comment to the petition,[33] First Union and Linda submitted that the petition is an improper
remedy since an order granting a motion to dismiss is not interlocutory. They contended that the dismissal
is final in nature; hence, an appeal, not a petition for certiorari under Rule 65, is the proper recourse.

The CA disagreed with First Union and Lindas contention. The assailed order, according to the CA,
categorically stated that the dismissal of the complaint was without prejudice. [34] As a dismissal without
prejudice, the order is interlocutory in nature and is not a final order.[35]

The CA, however, found that BPI failed to comply with the procedural requirements on non-forum
shopping.[36] Citing Sec. 5, Rule 7 of the Rules of Court, the CA ruled that the requirement that a petition
should sign the certificate of non-forum shopping applies even to corporations since the Rules of Court do
not distinguish between natural and civil persons.[37] Digital Microwave Corp. v. Court of Appeals, et
al.[38] holds that where a petitioner is corporation, the certification against forum shopping should be signed
by its duly authorized director or representative.

While the CA did not question the authority of Asis and Ong as bank representatives, the Bank
however failed to show - through an appropriate board resolution proof of their authority as
representatives. To the CA, this failure warranted the dismissal of the complaint.[39]

The CA lastly refused to accord merit to BPIs argument that it substantially complied with the
requirements of verification and certification; BPI only submitted the SPA and the Board Resolution after it
had filed the complaint.[40]

THE PETITIONERS ARGUMENTS

BPI maintains in the present petition that it attached a verification and certificate of non-forum
shopping to its complaint. Contesting the CAs interpretation of Shipside v. Court of Appeals,[41] it argues that
the Supreme Court actually excused Shipsides belated submission of its Secretarys Certificate and held
that it substantially complied with the rule requiring the submission of a verification and certificate of non-
forum shopping as it did, in fact, make a submission. From this starting point, it now asks the Court to excuse
its belated submission.[42]

BPI likewise contends that it is in a better position than the petitioner in Shipside because the latter
only submitted a secretarys certificate while it submitted a special power attorney signed by Zosimo. On this
same point, BPI also cites General Milling Corporation v. National Labor Relations Commission[43] where
the Court held that General Millings belated submission of a document to prove the authority of the
signatories to the verification and certificate of non-forum shopping was substantial compliance with Rules
of Court.
BPI finally urges the Court to reverse and set aside the Decision of the CA and to remand the case
to the RTC of Makati City for further proceedings under the principle that technicality should not defeat
substantial justice.[44]

THE RESPONDENTS ARGUMENTS

In their Memorandum dated September 25, 2009,[45] First Union and Linda allege that BPIs position on the
submission of the Board Resolution has been one of defiance.[46] BPIs failure to submit the required board
resolution is not an inadvertence but a wilful disregard of the Rules and a blatant refusal to heed the order
of the RTC. First Union and Linda point to BPIs opposition to the Motion to Dismiss as proof of BPIs wilful
disregard. BPI argued in this opposition that (1) the Rules do not require the presentation of a board
resolution, and (2) proof of such authority need not be attached to the initiatory pleading but can be
presented during trial.[47]

Further, instead of submitting a board resolution, BPI submitted a special power of attorney.[48] It
was only after First Union and Linda pointed out that the submitted special power of attorney cannot bind a
juridical entity did BPI change its position. Only then did BPI claim that it merely inadvertently failed to submit
the required secretarys certificate.[49]

This belated change of position, according to First Union and Linda, does not entitle BPI to the
jurisprudential exception established by the Court in Shipside where the Court held that the relaxation of the
rule requiring verification and certification of non-forum shopping is only for special circumstances or
compelling reasons.[50]

THE COURTS RULING


We rule in the respondents favor.

This Court has repeatedly emphasized the need to abide by the Rules of Court and the procedural
requirements it imposes. The verification of a complaint and the attachment of a certificate of non-forum
shopping are requirements that as pointed out by the Court, time and again are basic, necessary and
mandatory for procedural orderliness.

Thus, we cannot simply and in a general way apply given the factual circumstances of this case
the liberal jurisprudential exception in Shipside and its line of cases to excuse BPIs failure to submit a board
resolution. While we may have excused strict compliance in the past, we did so only on sufficient and
justifiable grounds that compelled a liberal approach while avoiding the effective negation of the intent of
the rule on non-forum shopping. In other words, the rule for the submission of a certificate of non-forum
shopping, proper in form and substance, remains to be a strict and mandatory rule; any liberal
application has to be justified by ample and sufficient reasons that maintain the integrity of, and do
not detract from, the mandatory character of the rule.

The rule, its relaxation and their rationale were discussed by the Court at length in Tible & Tible
Company, Inc. v. Royal Savings and Loan Association [51]where we said:

Much reliance is placed on the rule that "Courts are not slaves or robots of technical rules,
shorn of judicial discretion. In rendering justice, courts have always been, as they ought
to be, conscientiously guided by the norm that on balance, technicalities take a backseat
against substantive rights, and not the other way around." This rule must always be used
in the right context, lest injustice, rather than justice would be its end result.

It must never be forgotten that, generally, the application of the rules must be upheld, and
the suspension or even mere relaxation of its application, is the exception. This Court
previously explained:

The Court is not impervious to the frustration that litigants and lawyers
alike would at times encounter in procedural bureaucracy but imperative
justice requires correct observance of indispensable technicalities
precisely designed to ensure its proper dispensation. It has long been
recognized that strict compliance with the Rules of Court is indispensable
for the prevention of needless delays and for the orderly and expeditious
dispatch of judicial business.

Procedural rules are not to be disdained as mere technicalities that


may be ignored at will to suit the convenience of a party. Adjective
law is important in ensuring the effective enforcement of substantive rights
through the orderly and speedy administration of justice. These rules are
not intended to hamper litigants or complicate litigation but, indeed to
provide for a system under which a suitor may be heard in the correct form
and manner and at the prescribed time in a peaceful confrontation before
a judge whose authority they acknowledge.

It cannot be overemphasized that procedural rules have their own


wholesome rationale in the orderly administration of justice. Justice
has to be administered according to the Rules in order to obviate
arbitrariness, caprice, or whimsicality. We have been cautioned and
reminded in Limpot v. Court of Appeals, et al., that:

Rules of procedure are intended to ensure the orderly


administration of justice and the protection of substantive
rights in judicial and extrajudicial proceedings. It is a
mistake to propose that substantive law and adjective law
are contradictory to each other or, as often suggested,
that enforcement of procedural rules should never be
permitted if it will result in prejudice to the substantive
rights of the litigants. This is not exactly true; the concept
is much misunderstood. As a matter of fact, the policy of
the courts is to give both kinds of law, as complementing
each other, in the just and speedy resolution of the
dispute between the parties. Observance of both
substantive rights is equally guaranteed by due process,
whatever the source of such rights, be it the Constitution
itself or only a statute or a rule of court.
xxxx

x x x (T)hey are required to be followed except only when


for the most persuasive of reasons them may be relaxed
to relieve a litigant of an injustice not commensurate with
the degree of his thoughtlessness in not complying with
the procedure prescribed. x x x While it is true that a
litigation is not a game of technicalities, this does not
mean that the Rules of Court may be ignored at will and
at random to the prejudice of the orderly presentation and
assessment of the issues and their just
resolution. Justice eschews anarchy.
In particular, on the matter of the certificate of non-forum shopping that was similarly at
issue, Tible[52] pointedly said:

x x x the requirement under Administrative Circular No. 04-94 for a certificate of non-forum
shopping is mandatory. The subsequent compliance with said requirement does not
excuse a party's failure to comply therewith in the first instance. In those cases where
this Court excused the non-compliance with the requirement of the submission of a
certificate of non-forum shopping, it found special circumstances or compelling
reasons which made the strict application of said Circular clearly unjustified or
inequitable. x x x [Emphasis supplied.]

This same rule was echoed in Mediserv v. Court of Appeals[53] where we said in the course of allowing a
liberal justification:
It is settled that liberal construction of the rules may be invoked in situations where there
may be some excusable formal deficiency or error in a pleading, provided that the
same does not subvert the essence of the proceeding and connotes at least a reasonable
attempt at compliance with the rules. After all, rules of procedure are not to be applied
in a very rigid, technical sense; they are used only to help secure substantial
justice. [Emphasis supplied.]

To be sure, BPIs cited Shipside case also involved the absence of proof attached to the petition
that the filing officer was authorized to sign the verification and non-forum shopping certification. In the
Motion for Reconsideration that followed the dismissal of the case, the movant attached a certificate issued
by its board secretary stating that ten (10) days prior to the filing of the petition, the filing officer had been
authorized by petitioners board of directors to file said petition. Thus, proper authority existed but was simply
not attached to the petition. On this submission, the petitioner sought and the Court positively granted relief.
In the present case, we do not see a situation comparable to the cited Shipside. BPI did not submit
any proof of authority in the first instance because it did not believe that a board resolution evidencing such
authority was necessary. We note that instead of immediately submitting an appropriate board resolution
after the First Union and Linda filed their motion to dismiss BPI argued that it was not required to submit
one and even argued that:

The Complaint can only be dismissed under Section 5, Rule 7 of the 1997 Rules
of Civil Procedure if there was no certification against forum shopping. The Complaint
has. The provision cited does not even require that the person certifying show proof of his
authority to do so x x x.[54]

In fact, BPI merely attached to its opposition a special power of attorney issued by Mr. Kabigting,
a bank vice-president, granting Asis and Ong the authority to file the complaint. Thus, no direct authority to
file a complaint was initially ever given by BPI the corporate entity in whose name and behalf the complaint
was filed. Only in its Reply to the Comment to plaintiffs Opposition to the Motion to Dismiss did BPI beg the
kind indulgence of the Honorable Court as it inadvertently failed to submit with the Special Power of
Attorney the Corporate Secretarys Certificate which authorized Mr. Zosimo Kabigting to appoint his
substitutes.[55]Even this submission, however, was a roundabout way of authorizing the filing officers to file
the complaint.

BPI, interestingly, never elaborated nor explained its belatedly claimed inadvertence in failing to
submit a corporate secretarys certificate directly authorizing its representatives to file the complaint; it
particularly failed to specify the circumstances that led to the claimed inadvertence. Under the given facts,
we cannot but conclude that, rather than an inadvertence, there was an initial unwavering stance that the
submission of a specific authority from the board was not necessary. In blunter terms, the omission of the
required board resolution in the complaint was neither an excusable deficiency nor an omission that
occurred through inadvertence. In the usual course in the handling of a case, the failure was a mistake of
counsel that BPI never cared to admit but which nevertheless bound it as a client. From this perspective,
BPIs case is different from Shipside so that the ruling in this cited case cannot apply.
Under the circumstances, what applies to the present case is the second paragraph of Section 5,
Rule 7 of the Rules of Court which states:

Failure to comply with the foregoing requirements shall not be curable by mere
amendment of the complaint or other initiatory pleading but shall be cause for the dismissal
of the case without prejudice, unless otherwise provided, upon motion and after hearing.

We thus hold that the dismissal of the case is the appropriate ruling from this Court, without prejudice to its
refiling as the Rules allow.

We end this Decision by quoting our parting words in Melo v. Court of Appeals:[56]

We are not unmindful of the adverse consequence to private respondent of a


dismissal of her complaint, nor of the time, effort, and money spent litigating up to this Court
solely on a so-called technical ground. Nonetheless, we hold that compliance with the
certification requirement on non-forum shopping should not be made subject to a partys
afterthought, lest the policy of the law be undermined.

WHEREFORE, we DENY the petitioners petition for review on certiorari, and AFFIRM the decision
dated November 2, 2004 of the Court of Appeals, in Bank of the Philippine Islands v. Hon. Romeo Barza,
et al. (CA-G.R. SP No. 75350), and the subsequent resolution dated May 25, 2005[57] denying BPIs Motion
for Reconsideration. The complaint filed against the respondents is DISMISSED without prejudice. Costs
against the petitioner.

4. PDF

5. FELIPE N. MADRIAN, G.R. No. 159374


Petitioner,

- Versus –

FRANCISCA R. MADRIAN,
Respondent. Promulgated:
July 12, 2007

When a family breaks up, the children are always the victims. The ensuing battle for custody of the
minor children is not only a thorny issue but also a highly sensitive and heart-rending affair. Such is the
case here. Even the usually technical subject of jurisdiction became emotionally charged.

Petitioner Felipe N. Madrian and respondent Francisca R. Madrian were married on July 7, 1993 in
Paraaque City. They resided in San Agustin Village, Brgy. Moonwalk, Paraaque City.

Their union was blessed with three sons and a daughter: Ronnick, born on January 30, 1994;
Phillip, born on November 19, 1996; Francis Angelo, born on May 12, 1998 and Krizia Ann, born on
December 12, 2000.

After a bitter quarrel on May 18, 2002, petitioner allegedly left their conjugal abode and took their three
sons with him to Ligao City, Albay and subsequently to Sta. Rosa, Laguna. Respondent sought the help of
her parents and parents-in-law to patch things up between her and petitioner to no avail. She then brought
the matter to the Lupong Tagapamayapa in their barangay but this too proved futile.

Thus respondent filed a petition for habeas corpus of Ronnick, Phillip and Francis Angelo in the
Court of Appeals, alleging that petitioners act of leaving the conjugal dwelling and going to Albay and then
to Laguna disrupted the education of their children and deprived them of their mothers care. She prayed
that petitioner be ordered to appear and produce their sons before the court and to explain why they should
not be returned to her custody.

Petitioner and respondent appeared at the hearing on September 17, 2002. They initially agreed that
petitioner would return the custody of their three sons to respondent. Petitioner, however, had a change of
heart[1] and decided to file a memorandum.

On September 3, 2002, petitioner filed his memorandum [2] alleging that respondent was unfit to take
custody of their three sons because she was habitually drunk, frequently went home late at night or in the
wee hours of the morning, spent much of her time at a beer house and neglected her duties as a mother.
He claimed that, after their squabble on May 18, 2002, it was respondent who left, taking their daughter
with her. It was only then that he went to Sta. Rosa, Laguna where he worked as a tricycle driver. He
submitted a certification from the principal of the Dila Elementary School in Sta. Rosa, Laguna that Ronnick
and Phillip were enrolled there. He also questioned the jurisdiction of the Court of Appeals claiming that
under Section 5(b) of RA 8369 (otherwise known as the Family Courts Act of 1997) family courts have
exclusive original jurisdiction to hear and decide the petition for habeas corpus filed by respondent.[3]

For her part, respondent averred that she did not leave their home on May 18, 2002 but was driven
out by petitioner. She alleged that it was petitioner who was an alcoholic, gambler and drug addict.
Petitioners alcoholism and drug addiction impaired his mental faculties, causing him to commit acts of
violence against her and their children. The situation was aggravated by the fact that their home was
adjacent to that of her in-laws who frequently meddled in their personal problems.[4]

On October 21, 2002, the Court of Appeals[5] rendered a decision[6] asserting its authority to take
cognizance of the petition and ruling that, under Article 213 of the Family Code, respondent was entitled to
the custody of Phillip and Francis Angelo who were at that time aged six and four, respectively, subject to
the visitation rights of petitioner. With respect to Ronnick who was then eight years old, the court ruled that
his custody should be determined by the proper family court in a special proceeding on custody of minors
under Rule 99 of the Rules of Court.

Petitioner moved for reconsideration of the Court of Appeals decision but it was denied. Hence,
this recourse.

Petitioner challenges the jurisdiction of the Court of Appeals over the petition for habeas corpus and
insists that jurisdiction over the case is lodged in the family courts under RA 8369. He invokes Section 5(b)
of RA 8369:

Section 5. Jurisdiction of Family Courts. The Family Courts shall have exclusive
original jurisdiction to hear and decide the following cases:

xxxxxxxxx

b) Petitions for guardianship, custody of children, habeas corpus in relation to the


latter;

xxxxxxxxx

Petitioner is wrong.

In Thornton v. Thornton,[7] this Court resolved the issue of the Court of Appeals jurisdiction to issue writs
of habeas corpus in cases involving custody of minors in the light of the provision in RA 8369 giving family
courts exclusive original jurisdiction over such petitions:
The Court of Appeals should take cognizance of the case since there is
nothing in RA 8369 that revoked its jurisdiction to issue writs of habeas
corpus involving the custody of minors.

xxxxxxxxx

We rule therefore that RA 8369 did not divest the Court of Appeals and the Supreme
Court of their jurisdiction over habeas corpus cases involving the custody of
minors.

xxxxxxxxx

The provisions of RA 8369 reveal no manifest intent to revoke the jurisdiction of


the Court of Appeals and Supreme Court to issue writs of habeas corpus relating to the
custody of minors. Further, it cannot be said that the provisions of RA 8369, RA 7092 [An
Act Expanding the Jurisdiction of the Court of Appeals] and BP 129 [The Judiciary
Reorganization Act of 1980] are absolutely incompatible since RA 8369 does not prohibit
the Court of Appeals and the Supreme Court from issuing writs of habeas corpus in cases
involving the custody of minors. Thus, the provisions of RA 8369 must be read in harmony
with RA 7029 and BP 129 that family courts have concurrent jurisdiction with the
Court of Appeals and the Supreme Court in petitions for habeas corpus where the
custody of minors is at issue.[8] (emphases supplied)

The jurisdiction of the Court of Appeals over petitions for habeas corpus was further affirmed by A.M. No.
03-03-04-SC (April 22, 2004) in Re: Rule on Custody of Minors and Writ of Habeas Corpus in Relation to
Custody of Minors:
In any case, whatever uncertainty there was has been settled with the
adoption of A.M. No. 03-03-04-SC Re: Rule on Custody of Minors and Writ of Habeas
Corpus in Relation to Custody of Minors. Section 20 of the rule provides that:

Section 20. Petition for writ of habeas corpus. A verified petition


for a writ of habeas corpus involving custody of minors shall be filed with
the Family Court. The writ shall be enforceable within its judicial region
to which the Family Court belongs.
xxxxxxxxx

The petition may likewise be filed with the Supreme


Court, Court of Appeals, or with any of its members and, if so granted,
the writ shall be enforceable anywhere in the Philippines. The writ
may be made returnable to a Family Court or to any regular court within
the region where the petitioner resides or where the minor may be found
for hearing and decision on the merits.

From the foregoing, there is no doubt that the Court of Appeals and Supreme
Court have concurrent jurisdiction with family courts in habeas corpus cases
where the custody of minors is involved.[9] (emphases supplied)

We note that after petitioner moved out of their Paraaque residence on May 18, 2002, he twice transferred
his sons to provinces covered by different judicial regions. This situation is what the Thornton interpretation
of RA 8369s provision on jurisdiction precisely addressed:

[The reasoning that by giving family courts exclusive jurisdiction over habeas
corpus cases, the lawmakers intended them to be the sole courts which can issue writs
of habeas corpus] will result in an iniquitous situation, leaving individuals like [respondent]
without legal recourse in obtaining custody of their children. Individuals who do not know
the whereabouts of minors they are looking for would be helpless since they cannot seek
redress from family courts whose writs are enforceable only in their respective territorial
jurisdictions. Thus, if a minor is being transferred from one place to another, which
seems to be the case here, the petitioner in a habeas corpus case will be left
without legal remedy. This lack of recourse could not have been the intention of the
lawmakers when they passed [RA 8369].[10]

Moreover, a careful reading of Section 5(b) of RA 8369 reveals that family courts are vested with
original exclusive jurisdiction in custody cases, not in habeas corpus cases. Writs of habeas corpus which
may be issued exclusively by family courts under Section 5(b) of RA 8369 pertain to the ancillary
remedy that may be availed of in conjunction with a petition for custody of minors under Rule 99 of the
Rules of Court. In other words, the issuance of the writ is merely ancillary to the custody case pending
before the family court. The writ must be issued by the same court to avoid splitting of jurisdiction, conflicting
decisions, interference by a co-equal court and judicial instability.

The rule therefore is: when by law jurisdiction is conferred on a court or judicial officer, all auxiliary
writs, processes and other means necessary to carry it into effect may be employed by such court or
officer.[11] Once a court acquires jurisdiction over the subject matter of a case, it does so to the exclusion of
all other courts, including related incidents and ancillary matters.
Accordingly, the petition is hereby DENIED.

6. HOME GUARANTY CORPORATION, Petitioner, vs. R-II BUILDERS INC., and NATIONAL
HOUSING AUTHORITY, Respondents.

Primarily assailed in this petition for review filed pursuant to Rule 45 of the 1997 Rules of Civil Procedure,
is the Decision dated 21 January 2010 rendered by the Former Fifteenth Division of the Court of Appeals
(CA) in CA-G.R. SP No. 111153,1 the dispositive portion of which states as follows:

WHEREFORE, the petition for certiorari and prohibition is hereby DENIED.

The assailed Orders, dated March 3, 2009 and September 29, 2009, of the Regional Trial Court of Manila,
Branch 22 are hereby AFFIRMED.

Consequently, the injunction earlier issued on December 4, 2009, restraining the proceedings in Civil Case
No. 05-113407, is hereby DISSOLVED.2

The Facts

On 19 March 1993, a Joint Venture Agreement (JVA) was entered into between respondents National
Housing Authority (NHA) and R-II Builders, Inc. (R-II Builders) for the implementation of the Smokey
Mountain Development and Reclamation Project (SMDRP). Amended and restated on 21 February
19943 and 11 August 1994,4 the JVA was aimed at implementing a two-phase conversion of the Smokey
Mountain Dumpsite "into a habitable housing project inclusive of the reclamation of the area across Radial
Road 10 (R-10)".5 By the terms of the JVA, R-II Builders, as developer, was entitled to own 79 hectares of
reclaimed land and the 2.3 hectare commercial area at the Smokey Mountain. As landowner/implementing
agency, NHA, on the other hand, was entitled to own the 2,992 temporary housing units agreed to be built
in the premises, the cleared and fenced incinerator site consisting of 5 hectares, 3,520 units of permanent
housing to be awarded to qualified on site residents, the industrial area consisting of 3.2 hectares and the
open spaces, roads and facilities within the Smokey Mountain Area. 6

On 26 September 1994, NHA and R-II Builders, alongside petitioner Housing Guaranty Corporation (HGC)
as guarantor and the Philippine National Bank (PNB) as trustee, entered into an Asset Pool Formation Trust
Agreement which provided the mechanics for the implementation of the project.7 To back the project, an
Asset Pool was created composed of the following assets: (a) the 21.2 hectare Smokey Mountain Site in
Tondo, Manila; (b) the 79-hectare Manila Bay foreshore property in the name of the NHA; (c) the Smokey
Mountain Project Participation Certificates (SMPPCs) to be issued, or their money proceeds; (d) disposable
assets due to R-II Builders and/or its proceeds as defined in the JVA; (e) the resulting values inputted by
R-II Builders for pre-implementation activities and some start-up works amounting to ₱300,000,000.00; (f)
the 2,992 temporary housing facilities/units to be constructed by R-II Builders; and, (g) all pertinent
documents and records of the project.8

On the same date, the parties likewise executed a Contract of Guaranty whereby HGC, upon the call made
by PNB and conditions therein specified, undertook to redeem the regular SMPPCs upon maturity and to
pay the simple interest thereon to the extent of 8.5% per annum.9 The foregoing agreements led to the
securitization of the project through the issuance of 5,216 SMPPCs upon the Asset Pool, with a par value
of 1 Million each, classified and to be redeemed by the trustee or, in case of call on its guaranty, by HGC,
in the following order of priority:

a) Regular SMPPCs worth ₱2.519 Billion, issued for value to the general public at specified
interests and maturity dates. These were to be redeemed by the PNB which was obliged to exhaust
all liquid assets of the Asset Pool before calling on the HGC guarantee;

b) Special SMPPCs worth ₱1.403 Billion, issued exclusively to the NHA for conveyance of the
Smokey Mountain Site and Manila Bay foreshore property to the Asset Pool, redeemable upon
turnover of the developed project; and

c) Subordinated SMPPCs worth ₱1.294 Billion, issued exclusively to R-II Builders for its rights and
interests in the JVA, redeemable with the turnover of all residual values, assets and properties
remaining in the Asset Pool after both the Regular and Special SMPPCs are redeemed and all the
obligations of the Asset Pool are settled.10

Subsequent to R-II Builders' infusion of ₱300 Million into the project, the issuance of the SMPPCs and the
termination of PNB’s services on 29 January 2001, NHA, R-II Builders and HGC agreed on the institution
of Planters Development Bank (PDB) as trustee on 29 January 2001.11 By 24 October 2002, however, all
the Regular SMPPCs issued had reached maturity and, unredeemed, already amounted to an aggregate
face value of ₱2.513 Billion. The lack of liquid assets with which to effect redemption of the regular SMPPCs
prompted PDB to make a call on HGC’s guaranty and to execute in the latter’s favor a Deed of Assignment
and Conveyance (DAC) of the entire Asset Pool, consisting of: (a) 105 parcels of land comprising the
Smokey Mountain Site and the Reclamation Area, with a total area of 539,471.47 square meters, and all
the buildings and improvements thereon; (b) shares of stock of Harbour Centre Port Terminal, Inc. (HCPTI);
and, (c) other documents.12

On 1 September 2005, R-II Builders filed the complaint against HGC and NHA which was docketed as Civil
Case No. 05-113407 before Branch 24 of the Manila Regional Trial Court, a Special Commercial Court
(SCC). Contending that HGC’s failure to redeem the outstanding regular SMPPCs despite obtaining
possession of the Asset Pool ballooned the stipulated interests and materially prejudiced its stake on the
residual values of the Asset Pool, R-II Builders alleged, among other matters, that the DAC should be
rescinded since PDB exceeded its authority in executing the same prior to HGC’s redemption and payment
of the guaranteed SMPPCs; that while the estimated value of Asset Pool amounted to ₱5,919,716,618.62
as of 30 June 2005, its total liabilities was estimated at ₱2,796,019,890.41; and, that with the cessation of
PDB’s functions as a trustee and HGC’s intention to use the Asset Pool to settle its obligations to the Social
Security System (SSS), it was best qualified to be appointed as new trustee in the event of the resolution
of the DAC. Assessed docket fees corresponding to an action incapable of pecuniary estimation, the
complaint sought the grant of the following reliefs: (a) a temporary restraining order/preliminary and
permanent injunction, enjoining disposition/s of the properties in the Asset Pool; (b) the resolution or, in the
alternative, the nullification of the DAC; (c) R-II Builders' appointment as trustee pursuant to Rule 98 of the
Rules of Court; (d) HGC’s rendition of an accounting of the assets and the conveyance thereof in favor of
R-II Builders; and, (e) ₱500,000.00 in attorney’s fees.13
On 26 October 2005, Branch 24 of the Manila RTC issued the writ of preliminary injunction sought by R-II
Builders which, upon the challenge thereto interposed by HGC, was later affirmed by the CA in the 17
December 2007 decision rendered in CA-G.R. SP No. 98953.14 Having filed its answer to the complaint, in
the meantime, HGC went on to move for the conduct of a preliminary hearing on its affirmative defenses
which included such grounds as lack of jurisdiction, improper venue and the then pendency before this
Court of G.R. No. 164537, entitled Francisco Chavez vs. National Housing Authority, et al., a case which
challenged, among other matters, the validity of the JVA and its subsequent amendments. 15 On 2 August
2007, R-II Builders, in turn, filed a motion to admit16 its Amended and Supplemental Complaint which
deleted the prayer for resolution of the DAC initially prayed for in its original complaint. In lieu thereof, said
pleading introduced causes of action for conveyance of title to and/or possession of the entire Asset Pool,
for NHA to pay the Asset Pool the sum of ₱1,803,729,757.88 representing the cost of the changes and
additional works on the project and for an increased indemnity for attorney’s fees in the sum of
₱2,000,000.00.17

Consistent with its joint order dated 2 January 2008 which held that R-II Builders’ complaint was an ordinary
civil action and not an intra-corporate controversy,18 Branch 24 of the Manila RTC issued a clarificatory
order dated 1 February 2008 to the effect, among other matters, that it did not have the authority to hear
the case.19 As a consequence, the case was re-raffled to respondent Branch 22 of the Manila RTC
(respondent RTC) which subsequently issued the 19 May 2008 order which, having determined that the
case is a real action, admitted the aforesaid Amended and Supplemental Complaint, subject to R-II Builders’
payment of the "correct and appropriate" docket fees.20 On 15 August 2008, however, R-II Builders filed a
motion to admit it Second Amended Complaint, on the ground that its previous Amended and Supplemental
Complaint had not yet been admitted in view of the non-payment of the correct docket fees therefor.21 Said
Second Amended Complaint notably resurrected R-II Builders’ cause of action for resolution of the DAC,
deleted its causes of action for accounting and conveyance of title to and/or possession of the entire Asset
Pool, reduced the claim for attorney’s fees to ₱500,000.00, sought its appointment as Receiver pursuant
to Rule 59 of the Rules of Court and, after an inventory in said capacity, prayed for approval of the liquidation
and distribution of the Asset Pool in accordance with the parties’ agreements. 22

On 2 September 2008, HGC filed its opposition to the admission of R-II Builders’ Second Amended
Complaint on the ground that respondent RTC had no jurisdiction to act on the case until payment of the
correct docket fees and that said pleading was intended for delay and introduced a new theory inconsistent
with the original complaint and the Amended and Supplemental Complaint. Claiming that R-II Builders had
defied respondent court’s 19 May 2008 order by refusing to pay the correct docket fees, HGC additionally
moved for the dismissal of the case pursuant to Section 3, Rule 17 of the 1997 Rules of Civil
Procedure.23 On 24 November 2008, R-II Builders also filed an Urgent Ex-Parte Motion for Annotation of
Lis Pendens on the titles of the properties in the Asset Pool, on the ground that HGC had sold and/or was
intending to dispose of portions thereof, in violation of the writ of preliminary injunction issued in the
premises.24 Finding that jurisdiction over the case was already acquired upon payment of the docket fees
for the original complaint and that the Second Amended Complaint was neither intended for delay nor
inconsistent with R-II Builders’ previous pleadings, respondent RTC issued its first assailed order dated 3
March 2009 which: (a) denied HGC’s motion to dismiss; (b) granted R-II Builders’ motion to admit its Second
Amended Complaint; and, (c) noted R-II Builders’ Urgent Ex-Parte Motion for Annotation of Lis Pendens,
to which the attention of the Manila Register of Deeds was additionally called. 25

Undaunted, HGC filed its 22 March 2009 motion for reconsideration of the foregoing order, arguing that: (a)
the case is real action and the docket fees paid by R-II Builders were grossly insufficient because the
estimated value of properties in the Asset Pool exceeds ₱5,000,000,000.00; (b) a complaint cannot be
amended to confer jurisdiction when the court had none; (c) the RTC should have simply denied the Urgent
Ex-Parte Motion for Annotation of Lis Pendens instead of rendering an advisory opinion thereon. In addition,
HGC faulted R-II Builders with forum shopping, in view of its 10 September 2008 filing of the complaint
docketed as Civil Case No. 08-63416 before Branch 91 of the Quezon City RTC, involving a claim for
receivables from the NHA.26 In turn, R-II Builders opposed the foregoing motion27 and, on the theory that
the Asset Pool was still in danger of dissipation, filed an urgent motion to resolve its application for the
appointment of a receiver and submitted its nominees for said position.28
On 29 September 2009, respondent RTC issued its second assailed order which (a) denied HGC’s motion
for reconsideration; (b) granted R-II Builders’ application for appointment of receiver and, for said purpose:
[i] appointed Atty. Danilo Concepcion as Receiver and, [ii] directed R-II Builders to post a bond in the sum
of ₱10,000,000.00.29Imputing grave abuse of discretion against the RTC for not dismissing the case and
for granting R-II Builders’ application for receivership, HGC filed the Rule 65 petition for certiorari and
prohibition docketed as CA-G.R. SP No. 111153 before the CA30 which, thru its Former Special Fifteenth
Division, rendered the herein assailed 21 January 2010 decision, 31 upon the following findings and
conclusions:

a) Irrespective of whether it is real or one incapable of pecuniary estimation, the action commenced
by R-II Builders indubitably falls squarely within the jurisdiction of respondent RTC;

b) From the allegations of R-II Builders’ original complaint and amended complaint the character of
the relief primarily sought, i.e., the declaration of nullity of the DAC, the action before respondent
RTC is one where the subject matter is incapable of pecuniary estimation;

c) R-II Builders need not pay any deficiency in the docket fees considering its withdrawal of its
Amended and Supplemental Complaint;

d) A receiver may be appointed without formal hearing, particularly when it is within the interest of
both parties and does not result in the delay of any government infrastructure projects or economic
development efforts;

e) Respondent RTC’s act of calling the attention of the Manila Registrar of Deeds to R-II Builders’
Urgent Ex-Parte Motion for Annotation of Lis Pendens is well-within its residual power to act on
matters before it; and

f) The withdrawal of R-II Builders’ Amended and Supplemental Complaint discounted the forum
shopping imputed against it by HGC.32

HGC’s motion for reconsideration of the foregoing decision 33 was denied for lack of merit in the CA’s
resolution dated 21 June 2010, hence, this petition.

The Issues

HGC urges the affirmative of the following issues in urging the grant of its petition, to wit:

"Did the Honorable Court of Appeals Seriously Err When It Failed to Rule That:

I. The Regional Trial Court a quo had no jurisdiction to proceed with the case considering that:

(1) the original court was without authority to hear the case and;

(2) despite an unequivocal order from the trial court a quo, Private Respondent (R-II Builders) failed
and refused to pay the correct and proper docket fees, whether it be for a real or personal action,
based on the values of the properties or claims subject of the complaints.

II. Since the Honorable Court of Appeals had characterized the case as a personal action, the action before
the Regional Trial Court a quo should have been dismissed for improper venue.

III. The order appointing a receiver was made with grave abuse of discretion as amounting to lack of
jurisdiction for having been issued under the following circumstances:
(1) It was made without a hearing and without any evidence of its necessity;

(2) It was unduly harsh and totally unnecessary in view of other available remedies, especially
considering that Petitioner HGC is conclusively presumed to be solvent;

(3) It effectively prevented the performance of HGC’s functions in recovering upon its guaranty
exposure and was in contravention of Presidential Decree Nos. 385 and 1818, Republic Act No.
8927 and Supreme Court Circular Nos. 2-91, 13-93, 68-94 and Administrative Circular No. 11-
00."34

Acting on HGC’s motion for resolution of its application for a temporary restraining order and/or preliminary
injunction,35 the Court issued the resolution dated 23 August 2010, enjoining the enforcement of respondent
RTC’s assailed orders.36

The Court’s Ruling

We find the petition impressed with merit.

Jurisdiction is defined as the authority to hear and determine a cause or the right to act in a
case.37 In addition to being conferred by the Constitution and the law, 38 the rule is settled that a
court’s jurisdiction over the subject matter is determined by the relevant allegations in the
complaint,39 the law in effect when the action is filed,40 and the character of the relief sought
irrespective of whether the plaintiff is entitled to all or some of the claims asserted.41Consistent with
Section 1, Rule 141 of the Revised Rules of Court which provides that the prescribed fees shall be paid
in full "upon the filing of the pleading or other application which initiates an action or proceeding",
the well-entrenched rule is to the effect that a court acquires jurisdiction over a case only upon the
payment of the prescribed filing and docket fees.42

The record shows that R-II Builders’ original complaint dated 23 August 2005 was initially docketed as Civil
Case No. 05-113407 before Branch 24 of the Manila, a designated Special Commercial Court.43 With
HGC’s filing of a motion for a preliminary hearing on the affirmative defenses asserted in its answer 44 and
R-II Builders’ filing of its Amended and Supplemental Complaint dated 31 July 2007,45 said court issued an
order dated 2 January 2008 ordering the re-raffle of the case upon the finding that the same is not an intra-
corporate dispute.46 In a clarificatory order dated 1 February 2008,47 the same court significantly took
cognizance of its lack of jurisdiction over the case in the following wise:

At the outset, it must be stated that this Court is a designated Special Commercial Court tasked to try and
hear, among others, intra-corporate controversies to the exclusion of ordinary civil cases.

When the case was initially assigned to this Court, it was classified as an intra-corporate case. However,
in the ensuing proceedings relative to the affirmative defences raised by defendants, even the plaintiff
conceded that the case is not an intra-corporate controversy or even if it is, this Court is without authority
to hear the same as the parties are all housed in Quezon City.

Thus, the more prudent course to take was for this Court to declare that it does not have the authority to
hear the complaint it being an ordinary civil action. As to whether it is personal or civil, this Court would
rather leave the resolution of the same to Branch 22 of this Court. (Italics supplied).

We find that, having squarely raised the matter in its Rule 65 petition for certiorari and prohibition docketed
as CA-G.R. SP No. 111153,48 HGC correctly faults the CA for not finding that Branch 24 of the Manila RTC
had no authority to order the transfer of the case to respondent RTC.49 Being outside the jurisdiction of
Special Commercial Courts, the rule is settled that cases which are civil in nature, like the one commenced
by R-II Builders, should be threshed out in a regular court.50 With its acknowledged lack of jurisdiction over
the case, Branch 24 of the Manila RTC should have ordered the dismissal of the complaint, since a court
without subject matter jurisdiction cannot transfer the case to another court. 51 Instead, it should have simply
ordered the dismissal of the complaint, considering that the affirmative defenses for which HGC sought
hearing included its lack of jurisdiction over the case.

Calleja v. Panday,52 while on facts the other way around, i.e., a branch of the RTC exercising jurisdiction
over a subject matter within the Special Commercial Court’s authority, dealt squarely with the issue:

Whether a branch of the Regional Trial Court which has no jurisdiction to try and decide a case has authority
to remand the same to another co-equal Court in order to cure the defects on venue and jurisdiction.

Calleja ruled on the issue, thus:

Such being the case, RTC Br. 58 did not have the requisite authority or power to order the transfer of the
case to another branch of the Regional Trial Court. The only action that RTC-Br. 58 could take on the matter
was to dismiss the petition for lack of jurisdiction.

Certainly, the pronouncement of Br. 24, the Special Commercial Court, in its Joint Order of 2 January 2008
that the case is not an intracorporate controversy, amplified in its Order of 1 February 2008 that it "does not
have the authority to hear the complaint it being an ordinary civil action" is incompatible with the directive
for the re-raffle of the case and to "leave the resolution of the same to Branch 22 of this Court." Such a
directive is an exercise of authority over the case, which authority it had in the same breath declared it did
not have. What compounds the jurisdictional error is the fact that at the time of its surrender of jurisdiction,
Br. 24 had already acted on the case and had in fact, on 26 October 2005, issued the writ of preliminary
injunction sought by herein respondent R-II Builders. At that point, there was absolutely no reason which
could justify a re-raffle of the case considering that the order that was supposed to have caused the re-
raffle was not an inhibition of the judge but a declaration of absence of jurisdiction. So faulty was the order
of re-raffle that it left the impression that its previously issued preliminary injunction remained effective since
the case from which it issued was not dismissed but merely transferred to another court. A re-raffle which
causes a transfer of the case involves courts with the same subject matter jurisdiction; it cannot involve
courts which have different jurisdictions exclusive of the other. More apt in this case, a re-raffle of a case
cannot cure a jurisdictional defect.

Prescinding from the foregoing considerations, and to show that the proceedings below was error upon
error, we find that the CA also gravely erred in not ruling that respondent RTC’s (Branch 22, the regular
court) jurisdiction over the case was curtailed by R-II Builders’ failure to pay the correct docket fees. In other
words, the jurisdictionally flawed transfer of the case from Branch 24, the SCC to Branch 22, the regular
court, is topped by another jurisdictional defect which is the non-payment of the correct docket fees. In its
order dated 19 May 2008 which admitted R-II Builders’ Amended and Supplemental Complaint, respondent
RTC distinctly ruled that the case was a real action and ordered the re-computation and payment of the
correct docket fees.53 In patent circumvention of said order, however, R-II Builders filed its 14 August 2008
motion to admit its Second Amended Complaint which effectively deleted its causes of action for accounting
and conveyance of title to and/or possession of the entire Asset Pool and, in addition to reducing the claim
for attorney’s fees and seeking its appointment as a receiver, reinstated its cause of action for resolution of
the DAC.54 Acting on said motion as well as the opposition and motion to dismiss interposed by
HGC,55 respondent RTC ruled as follows in its assailed 3 March 2009 order, 56 to wit:

1. The docket fees of the original complaint has been paid, thus, the Court already acquired
jurisdiction over the instant case. The admission of the Amended and Supplemental Complaint, is
subject to the payment of docket fees pursuant to the Order of this Court dated May 18, 2008. The
non-payment of the docket fees stated in the Order dated May 18, 2008 will result only in the non-
admission of the Amended and Supplemental Complaint, which means that the Original Complaint
remains. However, since the Amended and Supplemental Complaint is being withdrawn and in lieu
thereof a new Amended Complaint is sought to be admitted, there is no more need to pay the
docket fees as provided for in the said Order.

2. It is settled that once jurisdiction is acquired and vested in a Court, said Court maintains its
jurisdiction until judgment is had (Aruego, Jr., et al. vs. CA). Such acquired jurisdiction is not lost
by the amendment of a pleading that raises additional/new cause(s) of action. The jurisdiction of a
Court is not even lost even if the additional docket fees are required by reason of the amendment.

Indeed, the Supreme Court held in PNOC vs. Court of Appeals (G.R. No. 107518, October 8, 1998) that:

"Its failure to pay the docket fee corresponding to its increased claim for damages under the amended
complaint should not be considered as having curtailed the lower court’s jurisdiction. Pursuant to the ruling
in Sun Insurance Office, Ltd. (SIOL) v. Asuncion, the unpaid docket fees should be considered as a lien on
the judgment even though private respondent specified the amount of ₱600,000.00 as its claim for damages
in its amended complaint.

Thus, even on the assumption that additional docket fees are required as a consequence of any amended
complaint, its non-payment will not result in the court’s loss of jurisdiction over the case.57

Distinctly, the principal reference remained to be the "original complaint," in which R-II Builders itself
submitted that the case "is a real action as it affects title and possession of real property or interest therein."
It was precisely this submission which was the basis of the conclusion of the SCC court, Br. 24 that the
case is not an intra-corporate controversy and therefore is outside its authority.

We see from the assailed Order that the regular court accepted the case on the reason that "the docket
fees of the original complaint has been paid," so that, furthermore, the Amended and Supplemental
Complaint may be admitted "subject to the payment of docket fees." When the required fees were not paid,
the court considered it as resulting in the non-admission of the Amended and Supplemental Complaint such
that "the original complaint remains." That remaining original complaint can then be amended by "a new
Amended Complaint" which is no longer subject to the conditions attached to the unadmitted Amended and
Supplemental Complaint.

The Order of 3 March 2009, with its logic and reason, is wholly unacceptable.

In upholding the foregoing order as well as its affirmance in respondent RTC’s 29 September 2009
order,58 the CA ruled that the case – being one primarily instituted for the resolution/nullification of the DAC
– involved an action incapable of pecuniary estimation. While it is true, however, that R-II Builder's
continuing stake in the Asset Pool is "with respect only to its residual value after payment of all the regular
SMPPCs holders and the Asset Pool creditors",59 the CA failed to take into account the fact that R-II
Builders’ original complaint and Amended and Supplemental Complaint both interposed causes of action
for conveyance and/or recovery of possession of the entire Asset Pool. Indeed, in connection with its
second cause of action for appointment as trustee in its original complaint, 60 R-II Builders distinctly sought
the conveyance of the entire Asset Pool61 which it consistently estimated to be valued at ₱5,919,716,618.62
as of 30 June 2005.62 In its opposition to HGC’s motion to dismiss, R-II Builders even admitted that the
case is a real action as it affects title to or possession of real property or an interest therein.63With R-II
Builders' incorporation of a cause of action for conveyance of title to and/or possession of the entire Asset
Pool in its Amended and Supplemental Complaint,64 on the other hand, no less than respondent RTC, in
its 19 May 2008 order, directed the assessment and payment of docket fees corresponding to a real action.

Admittedly, this Court has repeatedly laid down the test in ascertaining whether the subject matter of an
action is incapable of pecuniary estimation by determining the nature of the principal action or remedy
sought. While a claim is, on the one hand, considered capable of pecuniary estimation if the action
is primarily for recovery of a sum of money, the action is considered incapable of pecuniary
estimation where the basic issue is something other than the right to recover a sum of money, the
money claim being only incidental to or merely a consequence of, the principal relief sought.65 To
our mind, the application of foregoing test does not, however, preclude the further classification of actions
into personal actions and real action, for which appropriate docket fees are prescribed. In contrast to
personal actions where the plaintiff seeks the recovery of personal property, the enforcement of a contract,
or the recovery of damages, real actions are those which affect title to or possession of real property,
or interest therein.66While personal actions should be commenced and tried where the plaintiff or
any of the principal plaintiffs resides, or where the defendant or any of the principal defendants
resides, or in the case of a non-resident defendant where he may be found, at the election of the
plaintiff,67 the venue for real actions is the court of the place where the real property is located.68

Although an action for resolution and/or the nullification of a contract, like an action for specific performance,
fall squarely into the category of actions where the subject matter is considered incapable of pecuniary
estimation,69 we find that the causes of action for resolution and/or nullification of the DAC was erroneously
isolated by the CA from the other causes of action alleged in R-II Builders' original complaint and Amended
and Supplemental Complaint which prayed for the conveyance and/or transfer of possession of the Asset
Pool. In Gochan v. Gochan,70 this Court held that an action for specific performance would still be
considered a real action where it seeks the conveyance or transfer of real property, or ultimately, the
execution of deeds of conveyance of real property. More to the point is the case of Ruby Shelter Builders
and Realty Development Corporation v. Hon. Pablo C. Formaran III71 where, despite the annulment of
contracts sought in the complaint, this Court upheld the directive to pay additional docket fees
corresponding to a real action in the following wise, to wit:

x x x [I]n Siapno v. Manalo, the Court disregarded the title/denomination of therein plaintiff Manalo's
amended petition as one for Mandamus with Revocation of Title and Damages; and adjudged the same to
be a real action, the filing fees for which should have been computed based on the assessed value of the
subject property or, if there was none, the estimated value thereof. The Court expounded in Siapno that:

In his amended petition, respondent Manalo prayed that NTA's sale of the property in dispute to Standford
East Realty Corporation and the title issued to the latter on the basis thereof, be declared null and void. In
a very real sense, albeit the amended petition is styled as one for "Mandamus with Revocation of Title and
Damages", it is, at bottom, a suit to recover from Standford the realty in question and to vest in respondent
the ownership and possession thereof. In short, the amended petition is in reality an action in res or a real
action. Our pronouncement in Fortune Motors (Phils.), Inc. vs. Court of Appeals is instructive. There, we
said:

A prayer for annulment or rescission of contract does not operate to efface the true objectives and nature
of the action which is to recover real property. (Inton, et al., v. Quintan, 81 Phil. 97, 1948)

An action to annul a real estate mortgage foreclosure sale is no different from an action to annul a private
sale of real property. (Muñoz v. Llamas, 87 Phil. 737, 1950).

While it is true that petitioner does not directly seek the recovery of title or possession of the property in
question, his action for annulment of sale and his claim for damages are closely intertwined with the issue
of ownership of the building which, under the law, is considered immovable property, the recovery of which
is petitioner's primary objective. The prevalent doctrine is that an action for the annulment or rescission of
a sale of real property does not operate to efface the fundamental and prime objective and nature of the
case, which is to recover said real property. It is a real action.72

Granted that R-II Builders is not claiming ownership of the Asset Pool because its continuing stake is, in
the first place, limited only to the residual value thereof, the conveyance and/or transfer of possession of
the same properties sought in the original complaint and Amended and Supplemental Complaint both
presuppose a real action for which appropriate docket fees computed on the basis of the assessed or
estimated value of said properties should have been assessed and paid. In support of its original
complaint’s second cause of action for appointment as trustee and conveyance of the properties in the
Asset Pool, R-II Builders distinctly alleged as follows:

5.12. As the Court-appointed Trustee, R-II Builders shall have and exercise the same powers, rights
and duties as if [it] had been originally appointed, having the principal duty of redeeming and buying
back the Regular SMPPC’s and thereafter liquidating the Asset Pool, which are also the end goals
of the Agreement.

5.12.1. R-II Builders, as the Trustee, shall have the power and right to invest, transfer, convey or
assign any of the assets of the Asset Pool, whether funds, receivables, real or personal property,
in exchange for shares of stocks, bonds, securities, real or personal properties of any kind, class
or nature, provided that any such investment, transfer, conveyance or assignment shall not impair
the value of the Asset Pool.

5.12.2. R-II Builders, as the Trustee, shall have the power and right to sell, change, assign or
otherwise dispose of any stocks, bonds, securities, real or personal properties or other assets
constituting the Asset Pool.

5.12. 3. R-II Builders, as the Trustee, shall have the power and right to enter into lease agreements
as lessor or any other related contract for the benefit of the Asset Pool; and

5.12.4. It is understood that the aforecited powers and rights of R-II Builders as the court-appointed
Trustee, are non-exclusive; and is deemed to include all the rights and powers necessary and
incidental to achieve the goals and objectives of the Agreement. 73

From the foregoing allegations in its original complaint, it cannot be gainsaid that R-II Builders was
unquestionably seeking possession and control of the properties in the Asset Pool which predominantly
consisted of real properties. Having admitted that "the case is a real action as it affects title to or possession
of real property or (an) interest therein",74 R-II Builders emphasized the real nature of its action by seeking
the grant of the following main reliefs in the Amended and Supplemental Complaint it subsequently filed, to
wit:

5. After trial on the merits, render judgment:

(i) Declaring the annulment of the Deed of Assignment and conveyance executed by PDB in favor
of HGC; or in the alternative, declaring the nullity of the said instrument;

(ii) Appointing R-II Builders as the Trustee of the Asset Pool Properties, with powers and
responsibilities including but not limited to those stated in 5.12.1, 5.12.2, 5.12.3 and 5.12.4 herein
and those spelled out in the Re-Stated Smokey Mountain Asset Pool Formation Trust Agreement;

(iii) Ordering HGC to render an accounting of all properties of the Asset Pool transferred thereto
under the Deed of Assignment and Conveyance and thereafter convey title to and/or possession of
the entire Asset Pool to R-II Builders as the Trustee thereof which assets consist of, but is not
limited to the following:

(a) 105 parcels of land comprising the Smokey Mountain Site, and, the Reclamation Area,
consisting of the 539,471.47 square meters, and all the buildings and improvements
thereon, with their corresponding certificates of title;

(b) shares of stock of Harbour Center Port Terminal, Inc. which are presently registered in
the books of the said company in the name of PDB for the account of the Smokey Mountain
Asset Pool; and
(c) other documents as listed in Annex E of the Contract of Guaranty.

(iv) Ordering NHA to pay the Asset Pool the amount of Php1,803,729,757.88 including the direct
and indirect cost thereon as may be found by this Honorable Court to be due thereon;

(v) Making the injunction permanent;

(vi) Ordering HGC and the NHA to pay Attorney’s fees in the amount of ₱2,000,000 and the costs
of suit.75

For failure of R-II Builders to pay the correct docket fees for its original complaint or, for that matter, its
Amended and Supplemental Complaint as directed in respondent RTC's 19 May 2008 order, it stands to
reason that jurisdiction over the case had yet to properly attach. Applying the rule that "a case is deemed
filed only upon payment of the docket fee regardless of the actual date of filing in court" in the landmark
case of Manchester Development Corporation v. Court of Appeals, 76 this Court ruled that jurisdiction over
any case is acquired only upon the payment of the prescribed docket fee which is both mandatory and
jurisdictional. To temper said ruling, the Court subsequently issued the following guidelines in Sun
Insurance Office, Ltd. v. Hon. Maximiano Asuncion,77viz.:

1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of
the prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature
of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket
fee, the court may allow payment of the fee within a reasonable time but in no case beyond the
applicable prescriptive or reglementary period.

2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings,
which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The
court may also allow payment of said fee within a reasonable time but also in no case beyond its
applicable prescriptive or reglementary period.

3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading
and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not
specified in the pleading, or if specified the same has been left for determination by the court, the
additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of
the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the
additional fee.

True to the foregoing guidelines, respondent RTC admitted R-II Builder’s Amended and Supplemental
Complaint and directed the assessment and payment of the appropriate docket fees in the order dated 19
May 2008. Rather than complying with said directive, however, R-II Builders manifested its intent to evade
payment of the correct docket fees by withdrawing its Amended and Supplemental Complaint and, in lieu
thereof, filed its Second Amended Complaint which deleted its cause of action for accounting and
conveyance of title to and/or possession of the entire Asset Pool, reduced its claim for attorney’s fees,
sought its appointment as Receiver and prayed for the liquidation and distribution of the Asset Pool. 78 In
upholding the admission of said Second Amended Complaint in respondent RTC’s assailed 3 March 2009
Order, however, the CA clearly lost sight of the fact that a real action was ensconced in R-II Builders’ original
complaint and that the proper docket fees had yet to be paid in the premises. Despite the latter’s withdrawal
of its Amended and Supplemental Complaint, it cannot, therefore, be gainsaid that respondent RTC had
yet to acquire jurisdiction over the case for non-payment of the correct docket fees.

In the 15 February 2011 Resolution issued in the case of David Lu v. Paterno Lu Ym, Sr., 79 this Court,
sitting En Banc, had occasion to rule that an action for declaration of nullity of share issue, receivership and
corporate dissolution is one where the value of the subject matter is incapable of pecuniary estimation.
Subsequent to the trial court's rendition of a decision on the merits declared to be immediately executory
and the CA's denial of their application for a writ of preliminary injunction and/or temporary restraining order
to enjoin enforcement of said decision, the defendants questioned the sufficiency of the docket fees paid a
quo which supposedly failed take into consideration the value of the shares as well as the real properties
involved for which the plaintiff additionally caused notices of lis pendens to be annotated. Finding that
defendants were already estopped in questioning the jurisdiction of the trial court on the ground of non-
payment of the correct docket fees, the Court discounted intent to defraud the government on the part of
the plaintiff who can, at any rate, be required to pay the deficiency which may be considered a lien on the
judgment that may be rendered, without automatic loss of the jurisdiction already acquired, in the first
instance, by the trial court.1avvphi1

The factual and legal milieus of the case at bench could not, however, be more different. While R-II Builders
styled its original complaint and Amended and Supplemental Complaint as one primarily for the resolution
and/or declaration of the DAC, it simultaneously and unmistakably prayed for the conveyance, possession
and control of the Asset Pool. Alongside the fact that HGC has consistently questioned the sufficiency of
the docket fees paid by R-II Builders, estoppel cannot be said to have set in since, the lapse of more than
five years from the commencement of the complaint notwithstanding, it appears that the case has yet to be
tried on the merits. Having admitted that its original complaint partook the nature of a real action and having
been directed to pay the correct docket fees for its Amended and Supplemental Complaint, R-II Builders is,
furthermore, clearly chargeable with knowledge of the insufficiency of the docket fees it paid. Unmistakably
manifesting its intent to evade payment of the correct docket fees, moreover, R-II Builders withdrew its
Amended and Supplemental Complaint after its admission and, in lieu thereof, filed its’ Second Amended
Complaint on the ground that said earlier pleading cannot be considered admitted in view of its non-
payment of the docket and other fees it was directed to pay. In so doing, however, R-II Builders conveniently
overlooked the fact that the very same argument could very well apply to its original complaint for which –
given its admitted nature as a real action - the correct docket fees have also yet to be paid.

The importance of filing fees cannot be over-emphasized for they are intended to take care of court
expenses in the handling of cases in terms of costs of supplies, use of equipment, salaries and
fringe benefits of personnel, and others, computed as to man-hours used in the handling of each
case. The payment of said fees, therefore, cannot be made dependent on the result of the action
taken without entailing tremendous losses to the government and to the judiciary in particular.80 For
non-payment of the correct docket fees which, for real actions, should be computed on the basis of the
assessed value of the property, or if there is none, the estimated value thereof as alleged by the
claimant,81 respondent RTC should have denied admission of R-II Builders’ Second Amended Complaint
and ordered the dismissal of the case. Although a catena of decisions rendered by this Court eschewed
the application of the doctrine laid down in the Manchester case, 82 said decisions had been consistently
premised on the willingness of the party to pay the correct docket fees and/or absence of intention to evade
payment of the correct docket fees. This cannot be said of R-II Builders which not only failed to pay the
correct docket fees for its original complaint and Amended and Supplemental Complaint but also clearly
evaded payment of the same by filing its Second Amended Complaint.

By itself, the propriety of admitting R-II Builders’ Second Amended Complaint is also cast in dubious light
when viewed through the prism of the general prohibition against amendments intended to confer
jurisdiction where none has been acquired yet. Although the policy in this jurisdiction is to the effect that
amendments to pleadings are favored and liberally allowed in the interest of justice, amendment is not
allowed where the court has no jurisdiction over the original complaint and the purpose of the amendment
is to confer jurisdiction upon the court.83 Hence, with jurisdiction over the case yet to properly attach, HGC
correctly fault the CA for upholding respondent RTC’s admission of R-II Builders’ Second Amended
Complaint despite non-payment of the docket fees for its original complaint and Amended and
Supplemental Complaint as well as the clear intent to evade payment thereof.

With the determination of the jurisdictional necessity of the dismissal of the complaint of R-II Builders
docketed as Civil Case No. 05-113407, first before Br. 24 and later before Br. 22 both of the RTC of Manila,
we no longer find any reason to go into a discussion of the remaining issues HGC proffers for resolution.
In view, particularly, of its non-acquisition of jurisdiction over the case, respondent RTC clearly had no
authority to grant the receivership sought by R-II Builders. It needs pointing out though that the prayer for
receivership clearly indicates that the R-II Builders sought the transfer of possession of property consisting
of the assets of the JVA from HGC to the former’s named Receiver. As already noted, said transfer of
possession was sought by respondent R-II Builders since the very start, overtly at the first two attempts,
covertly in the last, the successive amendments betraying the deft maneuverings to evade payment of the
correct docket fees.

WHEREFORE, premises considered, the assailed Decision dated 21 January 2010 is REVERSED and
SET ASIDE. In lieu thereof, another is entered NULLIFYING the regular court’s, RTC Branch 22’s Orders
dated 3 March 2009 and 29 September 2009 as well as the SCC’s, RTC Branch 24’s Order dated 26
October 2005 which was rendered void by the SCC’s subsequent declaration of absence of authority over
the case. The complaint of R-II Builders docketed as Civil Case No. 05-113407 first before Br. 24 and
thereafter before Br. 22 both of the RTC of Manila is hereby DISMISSED.

7. A.L. ANG NETWORK, INC., Petitioner, vs. EMMA MONDEJAR, accompanied by her husband,
EFREN MONDEJAR, Respondent.

This is a direct recourse1 to the Court from the Decision2 dated November 23, 2011and Order3 dated
February 16, 2012 of the Regional Trial Court of Bacolod City, Branch 45 (RTC) in RTC Case No. 11-13833
which dismissed, on the ground of improper remedy, petitioner A.L. Ang Network, Inc.'s (petitioner) petition
for certiorari from the Decision4 dated June 10, 2011 of the Municipal Trial Court in Cities of Bacolod City,
Branch 4 (MTCC) in Civil Case No. SCC-1436, a small claims case for sum of money against respondent
Emma Mondejar (respondent).

The Facts

On March 23, 2011, petitioner filed a complaint5 for sum of money under the Rule of Procedure for Small
Claims Cases6 before the MTCC, seeking to collect from respondent the amount of ₱23,111.71 which
represented her unpaid water bills for the period June 1, 2002 to September 30, 2005.7

Petitioner claimed that it was duly authorized to supply water to and collect payment therefor from the
homeowners of Regent Pearl Subdivision, one of whom is respondent who owns and occupies Lot 8, Block
3 of said subdivision. From June 1, 2002 until September 30, 2005, respondent and her family consumed
a total of 1,150 cubic meters (cu. m.) of water, which upon application of the agreed rate of ₱113.00 for
every 10 cu. m. of water, plus an additional charge of ₱11.60 for every additional cu. m. of water, amounted
to ₱28,580.09.8 However, respondent only paid the amount of ₱5,468.38, thus, leaving a balance of
₱23,111.71 which was left unpaid despite petitioner’s repeated demands.9

In defense, respondent contended that since April 1998 up to February 2003, she religiously paid petitioner
the agreed monthly flat rate of ₱75.00 for her water consumption. Notwithstanding their agreement that the
same would be adjusted only upon prior notice to the homeowners, petitioner unilaterally charged her
unreasonable and excessive adjustments (at the average of 40 cu. m. of water per month or 1.3 cu. m. of
water a day) far above the average daily water consumption for a household of only 3 persons. She also
questioned the propriety and/or basis of the aforesaid ₱23,111.71 claim. 10

In the interim, petitioner disconnected respondent’s water line for not paying the adjusted water charges
since March 2003 up to August 2005.11

The MTCC Ruling

On June 10, 2011, the MTCC rendered a Decision12 holding that since petitioner was issued a Certificate
of Public Convenience (CPC) by the National Water Resources Board (NWRB) only on August 7, 2003,
then, it can only charge respondent the agreed flat rate of ₱75.00 per month prior thereto or the sum of
₱1,050.00 for the period June 1, 2002 to August 7, 2003. Thus, given that respondent had made total
payments equivalent to ₱1,685.99 for the same period, she should be considered to have fully paid
petitioner.14

The MTCC disregarded petitioner’s reliance on the Housing and Land Use Regulatory Board’s (HLURB)
Decision15dated August 17, 2000 in HLURB Case No. REM C6-00-001 entitled Nollie B. Apura, et al. v.
Dona Carmen I Subdivision, et al., as source of its authority to impose new water consumption rates for
water consumed from June 1, 2002 to August 7, 2003 in the absence of proof (a) that petitioner complied
with the directive to inform the HLURB of the result of its consultation with the concerned homeowners as
regards the rates to be charged, and (b) that the HLURB approved of the same. 16

Moreover, the MTCC noted that petitioner failed to submit evidence showing (a) the exact date when it
actually began imposing the NWRB approved rates; and (b) that the parties had a formal agreement
containing the terms and conditions thereof, without which it cannot establish with certainty respondent’s
obligation.17 Accordingly, it ruled that the earlier agreed rate of ₱75.00 per month should still be the basis
for respondent’s water consumption charges for the period August 8, 2003 to September 30, 2005.18 Based
on petitioner’s computation, respondent had only paid ₱300.00 of her ₱1,500.00 obligation for said period.
Thus, it ordered respondent to pay petitioner the balance thereof, equivalent to ₱1,200.00 with legal interest
at the rate of 6% per annum from date of receipt of the extrajudicial demand on October 14, 2010 until fully
paid.19

Aggrieved, petitioner filed a petition for certiorari20 under Rule 65 of the Rules of Court before the RTC,
ascribing grave abuse of discretion on the part of the MTCC in finding that it (petitioner) failed to establish
with certainty respondent’s obligation, and in not ordering the latter to pay the full amount sought to be
collected.

The RTC Ruling

On November 23, 2011, the RTC issued a Decision21 dismissing the petition for certiorari, finding that the
said petition was only filed to circumvent the non-appealable nature of small claims cases as provided
under Section 2322of the Rule of Procedure on Small Claims Cases. To this end, the RTC ruled that it
cannot supplant the decision of the MTCC with another decision directing respondent to pay petitioner a
bigger sum than that which has been awarded.

Petitioner moved for reconsideration23 but was denied in an Order24 dated February 16, 2012, hence, the
instant petition.

The Issue Before the Court

The sole issue in this case is whether or not the RTC erred in dismissing petitioner’s recourse under Rule
65 of the Rules of Court assailing the propriety of the MTCC Decision in the subject small claims case.

The Court’s Ruling

The petition is meritorious.

Section 23 of the Rule of Procedure for Small Claims Cases states that:

SEC. 23. Decision. — After the hearing, the court shall render its decision on the same day, based on the
facts established by the evidence (Form 13-SCC). The decision shall immediately be entered by the Clerk
of Court in the court docket for civil cases and a copy thereof forthwith served on the parties.

The decision shall be final and unappealable.


Considering the final nature of a small claims case decision under the above-stated rule, the remedy of
appeal is not allowed, and the prevailing party may, thus, immediately move for its
execution.25 Nevertheless, the proscription on appeals in small claims cases, similar to other
proceedings where appeal is not an available remedy, 26 does not preclude the aggrieved party from
filing a petition for certiorari under Rule 65 of the Rules of Court. This general rule has been enunciated
in the case of Okada v. Security Pacific Assurance Corporation,27 wherein it was held that:

In a long line of cases, the Court has consistently ruled that "the extraordinary writ of certiorari is always
available where there is no appeal or any other plain, speedy and adequate remedy in the ordinary course
of law." In Jaca v. Davao Lumber Co., the Court ruled:

x x x Although Section 1, Rule 65 of the Rules of Court provides that the special civil action of certiorari
may only be invoked when "there is no appeal, nor any plain, speedy and adequate remedy in the course
of law," this rule is not without exception. The availability of the ordinary course of appeal does not constitute
sufficient ground to prevent a party from making use of the extraordinary remedy of certiorari where appeal
is not an adequate remedy or equally beneficial, speedy and sufficient. It is the inadequacy – not the mere
absence – of all other legal remedies and the danger of failure of justice without the writ that usually
determines the propriety of certiorari.

This ruling was reiterated in Conti v. Court of Appeals:

Truly, an essential requisite for the availability of the extraordinary remedies under the Rules is an absence
of an appeal nor any "plain, speedy and adequate remedy" in the ordinary course of law, one which has
been so defined as a "remedy which (would) equally (be) beneficial, speedy and sufficient not merely a
remedy which at some time in the future will bring about a revival of the judgment x x x complained of in
the certiorari proceeding, but a remedy which will promptly relieve the petitioner from the injurious effects
of that judgment and the acts of the inferior court or tribunal" concerned. x x x (Emphasis supplied)

In this relation, it may not be amiss to placate the RTC’s apprehension that respondent’s recourse before
it (was only filed to circumvent the non-appealable nature of [small claims cases], because it asks [the court]
to supplant the decision of the lower [c]ourt with another decision directing the private respondent to pay
the petitioner a bigger sum than what has been awarded."28 Verily, a petition for certiorari, unlike an appeal,
is an original action29 designed to correct only errors of jurisdiction and not of judgment. Owing to its nature,
it is therefore incumbent upon petitioner to establish that jurisdictional errors tainted the MTCC Decision.
The RTC, in turn, could either grant or dismiss the petition based on an evaluation of whether or not the
MTCC gravely abused its discretion by capriciously, whimsically, or arbitrarily disregarding evidence that is
material to the controversy.30

In view of the foregoing, the Court thus finds that petitioner correctly availed of the remedy of certiorari to
assail the propriety of the MTCC Decision in the subject small claims case, contrary to the RTC’s ruling.

Likewise, the Court finds that petitioner filed the said petition before the proper forum (i.e., the RTC). To be
sure, the Court, the Court of Appeals and the Regional Trial Courts have concurrent jurisdiction to issue a
writ of certiorari.31Such concurrence of jurisdiction, however, does not give a party unbridled freedom to
choose the venue of his action lest he ran afoul of the doctrine of hierarchy of courts. Instead, a becoming
regard for judicial hierarchy dictates that petitions for the issuance of writs of certiorari against first level
courts should be filed with the Regional Trial Court, and those against the latter, with the Court of Appeals,
before resort may be had before the Court.32 This procedure is also in consonance with Section 4, Rule 65
of the Rules of Court.33

Hence, considering that small claims cases are exclusively within the jurisdiction of the Metropolitan Trial
Courts, Municipal Trial Courts in Cities, Municipal Trial Courts, and Municipal Circuit Trial Courts, 34 certiorari
petitions assailing its dispositions should be filed before their corresponding Regional Trial Courts. This
petitioner complied with when it instituted its petition for certiorari before the RTC which, as previously
mentioned, has jurisdiction over the same. In fine, the RTC erred in dismissing the said petition on the
ground that it was an improper remedy, and, as such, RTC Case No. 11-13833 must be reinstated and
remanded thereto for its proper disposition.

WHEREFORE, the petition is GRANTED. The Decision dated November 23, 2011 and Resolution dated
February 16, 2012 of the Regional Trial Court of Bacolod City, Branch 45 are REVERSED and SET ASIDE.
RTC Case No. 11-13833 is hereby REINSTATED and the court a quo is ordered to resolve the same with
dispatch.

8. SULTAN YAHYA "JERRY" M. TOMAWIS, Petitioner, vs. HON. RASAD G. BALINDONG, AMNA A.
PUMBAYA, JALILAH A. MANGOMPIA, and RAMLA A. MUSOR,Respondents.

This petition for certiorari, prohibition, and mandamus under Rule 65 seeks to nullify the Orders dated July
13, 2005, September 6, 2005, and February 6, 2008 issued by respondent Judge Rasad G. Balindong of
the Shari’a District Court (SDC), Fourth Judicial District in Marawi City, in Civil Case No. 102-97 entitled
Amna A. Pumbaya, et al. v. Jerry Tomawis, et al.

The Facts

Private respondents Amna A. Pumbaya, Jalilah A. Mangompia, and Ramla A. Musor are the daughters of
the late Acraman Radia. On February 21, 1997, private respondents filed with the SDC an action for quieting
of title of a parcel of land located in Banggolo, Marawi City, against petitioner Sultan Jerry Tomawis and
one Mangoda Radia. In their complaint, styled as Petition1 and docketed as Civil Case No. 102-97, private
respondents, as plaintiffs a quo, alleged the following:

(1) They were the absolute owners of the lot subject of the complaint, being the legal heirs of Acraman
Radia, who had always been in peaceful, continuous, and adverse possession of the property; (2) Tomawis
assumed ownership of the said property on the claim that he bought the same from Mangoda Radia, who,
in turn, claimed that he inherited it from his late father; (3) in 1996, they "were informed that their land [was]
leveled and the small houses [built] thereon with their permission were removed" upon the orders of
Tomawis; and (4) they had been unlawfully deprived of their possession of the land, and Tomawis’ actions
had cast a cloud of doubt on their title.

In his answer, Tomawis debunked the sisters’ claim of ownership and raised, as one of his affirmative
defenses treated by the court as a motion to dismiss, SDC’s lack of jurisdiction over the subject matter of
the case.2 As argued, the regular civil court, not SDC, had such jurisdiction pursuant to Batas Pambansa
Blg. (BP) 129 or the Judiciary Reorganization Act of 1980.3

Following the hearing on the affirmative defenses, respondent Judge Rasad Balindong, by Order of April
1, 2003, denied the motion. Apropos the jurisdiction aspect of the motion, respondent judge asserted the
SDC’s original jurisdiction over the case, concurrently with the Regional Trial Court (RTC), by force of Article
143, paragraph 2(b) of Presidential Decree No. (PD) 1083 or the Code of Muslim Personal Laws of the
Philippines.

On June 16, 2005, Tomawis filed an Urgent Motion to Dismiss with Prayer to Correct the Name of
Defendants to Read Sultan Yahya "Jerry" M. Tomawis & Mangoda M. Radia.4 In it, he alleged that title to
or possession of real property or interest in it was clearly the subject matter of the complaint which, thus,
brought it within the original exclusive jurisdiction of the regular courts in consonance with existing law. 5 On
July 13, 2005, the SDC denied this motion to dismiss.

Unsatisfied, Tomawis later interposed an Urgent Motion for Reconsideration with Prayer to Cancel and
Reset the Continuation of Trial Until After the Resolution of the Pending Incident. 6 Per Order7 dated
September 6, 2005, the SDC denied Tomawis’ urgent motion for reconsideration and ordered the
continuation of trial.
Forthwith, Tomawis repaired to the Court of Appeals (CA), Mindanao Station, on a petition for certiorari,
mandamus, and prohibition under Rule 65 to nullify, on jurisdictional grounds, the aforesaid SDC July 13,
2005 and September 6, 2005 Orders.

By Resolution8 of February 8, 2006, the appellate court dismissed the petition on the ground that the CA
was "not empowered to resolve decisions, orders or final judgments of the [SDCs]." Justifying its disposition,
the CA held that, pursuant to Art. 1459 of PD 1083, in relation to Art. VIII, Section 910 of Republic Act No.
(RA) 9054,11 the new organic law of the Autonomous Region in Muslim Mindanao, final decisions of the
SDC are reviewable by the yet to be established Shari’a Appellate Court. Pending the reorganization of the
Shari’a Appellate Court, the CA ruled that such intermediate appellate jurisdiction rests with the Supreme
Court.

Undeterred by the foregoing setback before the CA, Tomawis interposed, on January 29, 2008, before the
SDC another motion to dismiss on the same grounds as his previous motions to dismiss. The motion was
rejected by respondent Judge Balindong per his order of February 6, 2008, denying the motion with finality.

Hence, this recourse on the sole issue of:

WHETHER OR NOT THE PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION IN
DENYING PETITIONER’S MOTIONS TO DISMISS ON THE GROUND OF LACK OF JURISDICTION AND
IN DENYING PETITIONER’S MOTION SEEKING RECONSIDERATION OF THE ORDER DENYING HIS
MOTION TO DISMISS.

Simply put, the issue is whether or not the SDC can validly take cognizance of Civil Case No. 102-97.

The Court’s Ruling

Prefatorily, the Court acknowledges the fact that decades after the enactment in 1989 of the law 12 creating
the Shari’a Appellate Court and after the Court, per Resolution of June 8, 1999, 13 authorized its creation,
the Shari’a Appellate Court has yet to be organized with the appointment of a Presiding Justice and two
Associate Justices. Until such time that the Shari’a Appellate Court shall have been organized,
however, appeals or petitions from final orders or decisions of the SDC filed with the CA shall be
referred to a Special Division to be organized in any of the CA stations preferably composed of
Muslim CA Justices.

For cases where only errors or questions of law are raised or involved, the appeal shall be to this Court by
a petition for review on certiorari under Rule 45 of the Rules of Court pursuant to Art. VIII, Sec. 5 of the
Constitution and Sec. 2 of Rule 41 of the Rules.

To be sure, the Court has, on several occasions, passed upon and resolved petitions and cases emanating
from Shari’a courts. Among these was one involving the issue of whether or not grave abuse of discretion
attended the denial of a motion to implement a writ of execution.14 Still another involved the Shari’a courts’
jurisdiction in custody and guardianship proceedings,15 nullity of marriage and divorce when the parties
were both married in civil and Muslim rites,16 and settlement of estate proceedings where the deceased
was alleged to be not a Muslim,17 or where the estate covered properties situated in different provinces.18

The instant petition, involving only a question of law on the jurisdiction of the SDC over a complaint for
quieting of title, was properly instituted before the Court.

Petitioner asserts that Sec. 19(2), in relation to Sec. 33(3) of BP 129, as amended––by vesting original
exclusive jurisdiction to the RTCs or Municipal Trial Courts (MTCs), as the case may be, over civil actions
that involve the title to, or possession of, real property––effectively removed the concurrent jurisdiction once
pertaining to the SDC under Art. 143(2)(b) of PD 1083. In fine, petitioner contends that Art. 143 of PD 1083,
insofar as it granted the SDC concurrent jurisdiction over certain real actions, was repealed by the BP 129
provisions adverted to.

Disagreeing as to be expected, private respondents balk at the notion of the implied repeal petitioner
espouses, arguing that PD 1083, being a special, albeit a prior, law, has not been repealed by BP 129.
Putting private respondents’ contention in a narrower perspective, Art. 143(2)(b) of PD 1083 is of specific
applicability and, hence, cannot, under the rules of legal hermeneutics, be superseded by laws of general
application, absent an express repeal.

Petitioner’s claim has no basis.

The allegations, as well as the relief sought by private respondents, the elimination of the "cloud of doubts
on the title of ownership"19 on the subject land, are within the SDC’s jurisdiction to grant.

A brief background. The Judiciary Act of 1948 (RA 296) was enacted on June 17, 1948. It vested the Courts
of First Instance with original jurisdiction:

(b) In all civil actions which involve the title to or possession of real property, or any interest therein, or the
legality of any tax, impost or assessment, except actions of forcible entry into and detainer on lands or
buildings, original jurisdiction of which is conferred by this Act upon city and municipal courts.20 x x x

Subsequently, PD 1083, dated February 4, 1977, created the Shari’a courts, i.e., the SDC and the Shari’a
Circuit Court, both of limited jurisdiction. In Republic v. Asuncion,21 the Court, citing the Administrative Code
of 1987,22classified Shari’a courts as "regular courts," meaning they are part of the judicial department.

Art. 143 of PD 1083 vests SDCs, in certain cases, with exclusive original jurisdiction and with concurrent
original jurisdiction over certain causes of action. As far as relevant, Art. 143 reads as follows:

ARTICLE 143. Original jurisdiction.— (1) The Shari’a District Court shall have exclusive original jurisdiction
over:

xxxx

d) All actions arising from customary contracts in which the parties are Muslims, if they have not specified
which law shall govern their relations; and

xxxx

(2) Concurrently with existing civil courts, the Shari’a District Court shall have original jurisdiction over:

xxxx

(b) All other personal and real actions not mentioned in paragraph 1 (d) wherein the parties involved are
Muslims except those for forcible entry and unlawful detainer, which shall fall under the exclusive
original jurisdiction of the Municipal Circuit Court. (Emphasis added.)

On August 14, 1981, BP 129 took effect. Sec. 19 of BP 129, as later amended by RA 7691, 23 defining the
jurisdiction of the RTCs, provides:

Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the "Judiciary Reorganization Act
of 1980", is hereby amended to read as follows:
"Sec. 19. Jurisdiction in civil cases.—Regional Trial Courts shall exercise exclusive original jurisdiction:

xxxx

"(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, where
the assessed value of the property involved exceeds Twenty thousand pesos (P20,000,00) or, for civil
actions in Metro Manila, where such value exceeds Fifty thousand pesos (P50,000.00) except actions for
forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred
upon the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts." (Emphasis
supplied.)

As things stood prior to the effectivity date of BP 129, the SDC had, by virtue of PD 1083, original
jurisdiction, concurrently with the RTCs and MTCs, over all personal and real actions outside the purview
of Art. 143(1)(d) of PD 1083, in which the parties involved were Muslims, except those for ejectment.
Personal action is one that is founded on privity of contracts between the parties; 24 and in which
the plaintiff usually seeks the recovery of personal property, the enforcement of a contract, or
recovery of damages.25 Real action, on the other hand, is one anchored on the privity of real
estate,26 where the plaintiff seeks the recovery of ownership or possession of real property or
interest in it.27

On the other hand, BP 129, as amended, vests the RTC or the municipal trial court with exclusive original
jurisdiction in all civil actions that involve the title to or possession of real property, or any interest in it, and
the value of the property subject of the case or the jurisdictional amount, determining whether the case
comes within the jurisdictional competence of the RTC or the MTC. Orbeta v. Orbeta28 differentiated
personal action from real action in the following wise:

A real action, under Sec. 1, Rule 4 of the Rules of Court, is one that affects title to or possession of real
property, or an interest therein. Such actions should be commenced and tried in the proper court
which has jurisdiction over the area wherein the real property involved, or a portion thereof, is
situated. All other actions are personal and may be commenced and tried where the plaintiff or any
of the principal plaintiffs resides, or where the defendant or any of the principal defendants resides,
or in the case of a non-resident defendant where he may be found, at the election of the plaintiff.

Civil Case No. 102-97, judging from the averments in the underlying complaint, is basically a suit for
recovery of possession and eventual reconveyance of real property which, under BP 129, as amended,
falls within the original jurisdiction of either the RTC or MTC. In an action for reconveyance, all that must
be alleged in the complaint are two facts that, admitting them to be true, would entitle the plaintiff to recover
title to the disputed land, namely: (1) that the plaintiff is the owner of the land or has possessed the land in
the concept of owner; and (2) that the defendant has illegally dispossessed the plaintiff of the land.29 A
cursory perusal of private respondents’ complaint readily shows that that these requisites have been met:
they alleged absolute ownership of the subject parcel of land, and they were illegally dispossessed of their
land by petitioner. The allegations in the complaint, thus, make a case for an action for reconveyance.

Given the above perspective, the question that comes to the fore is whether the jurisdiction of the RTC or
MTC is to the exclusion of the SDC.

Petitioner’s version of the law would effectively remove the concurrent original jurisdiction granted by Art.
143, par. 2(b) of PD 1083 to civil courts and Shari’a courts over, among others:

All other personal and real actions not mentioned in paragraph 1 (d) wherein the parties involved are
Muslims except those for forcible entry and unlawful detainer, which shall fall under the exclusive original
jurisdiction of the Municipal Circuit Court. x x x
Petitioner’s interpretation of the law cannot be given serious thought. One must bear in mind that even if
Shari’a courts are considered regular courts, these are courts of limited jurisdiction. As we have observed
in Rulona-Al Awadhi v. Astih,30 the Code of Muslim Personal Laws creating said courts was promulgated
to fulfill "the aspiration of the Filipino Muslims to have their system of laws enforced in their communities."
It is a special law intended for Filipino Muslims, as clearly stated in the purpose of PD 1083:

ARTICLE 2. Purpose of Code. — Pursuant to Section 11 of Article XV of the Constitution of the Philippines,
which provides that "The State shall consider the customs, traditions, beliefs and interests of national
cultural communities in the formulation and implementation of state policies," this Code:

(a) Recognizes the legal system of the Muslims in the Philippines as part of the law of the land and
seeks to make Islamic institutions more effective;

(b) Codifies Muslim personal laws; and

(c) Provides for an effective administration and enforcement of Muslim personal laws among
Muslims.

A reading of the pertinent provisions of BP 129 and PD 1083 shows that the former, a law of general
application to civil courts, has no application to, and does not repeal, the provisions found in PD 1083, a
special law, which only refers to Shari’a courts.

A look at the scope of BP 129 clearly shows that Shari’a courts were not included in the reorganization of
courts that were formerly organized under RA 296. The pertinent provision in BP 129 states:

SECTION 2. Scope. — The reorganization herein provided shall include the Court of Appeals, the Court of
First Instance, the Circuit Criminal Courts, the Juvenile and Domestic Relations Courts, the Courts of
Agrarian Relations, the City Courts, the Municipal Courts, and the Municipal Circuit Courts.

As correctly pointed out by private respondents in their Comment,31 BP 129 was enacted to reorganize only
existing civil courts and is a law of general application to the judiciary. In contrast, PD 1083 is a special law
that only applies to Shari’a courts.

We have held that a general law and a special law on the same subject are statutes in pari materia and
should be read together and harmonized, if possible, with a view to giving effect to both.32 In the instant
case, we apply the principle generalia specialibus non derogant. A general law does not nullify a special
law. The general law will yield to the special law in the specific and particular subject embraced in the
latter.33 We must read and construe BP 129 and PD 1083 together, then by taking PD 1083 as an exception
to the general law to reconcile the two laws. This is so since the legislature has not made any express
repeal or modification of PD 1083, and it is well-settled that repeals of statutes by implication are not
favored.34 Implied repeals will not be declared unless the intent of the legislators is manifest. Laws are
assumed to be passed only after careful deliberation and with knowledge of all existing ones on the subject,
and it follows that the legislature did not intend to interfere with or abrogate a former law relating to the
same subject matter.35

In order to give effect to both laws at hand, we must continue to recognize the concurrent jurisdiction
enjoyed by SDCs with that of RTCs under PD 1083.

Moreover, the jurisdiction of the court below cannot be made to depend upon defenses set up in the answer,
in a motion to dismiss, or in a motion for reconsideration, but only upon the allegations of the
complaint.36 Jurisdiction over the subject matter of a case is determined from the allegations of the
complaint and the character of the relief sought.37 In the instant case, private respondents’ petition38 in Civil
Case No. 102-97 sufficiently alleged the concurrent original jurisdiction of the SDC.
While we recognize the concurrent jurisdiction of the SDCs and the RTCs with respect to cases involving
only Muslims, the SDC has exclusive original jurisdiction over all actions arising from contracts customary
to Muslims39to the exclusion of the RTCs, as the exception under PD 1083, while both courts have
concurrent original jurisdiction over all other personal actions. Said jurisdictional conferment, found in
Art. 143 of PD 1083, is applicable solely when both parties are Muslims and shall not be construed
to operate to the prejudice of a non-Muslim,40 who may be the opposing party against a Muslim.

Given petitioner’s flawed arguments, we hold that the respondent court did not commit any grave abuse of
discretion. Grave abuse of discretion is present when there is an arbitrary exercise of power owing from
passion, prejudice, or personal hostility; or a whimsical, arbitrary, or capricious exercise of power that
amounts to a shirking from or refusal to perform a positive duty enjoined by law or to act at all in
contemplation of law. The abuse of discretion must be patent and gross for the act to be held as one made
with grave abuse of discretion.41 We find respondent court’s issuance of the assailed orders justified and
with no abuse of discretion. Its reliance on the provisions of PD 1083 in asserting its jurisdiction was sound
and unassailable.

We close with the observation that what is involved here are not only errors of law, but also the errors of a
litigant and his lawyer. As may have been noted, petitioner Tomawis’ counsel veritably filed two (2) motions
to dismiss, each predicated on the sole issue of jurisdiction. The first may have been understandable. But
the second motion was something else, interposed as it was after the CA, by resolution, denied Tomawis’
petition for certiorari for want of jurisdiction on the part of the appellate court to review judgments or orders
of the SDC. The CA stated the observation, however, that Tomawis and his counsel may repair to this Court
while the Shari’a Appellate Court has yet to be organized. Petitioner waited two years after the CA issued
its denial before filing what virtually turned out to be his second motion to dismiss, coming finally to this
Court after the same motion was denied. The Court must express disapproval of the cunning effort of
Tomawis and his counsel to use procedural rules to the hilt to prolong the final disposition of this case.
From Alonso v. Villamor,42 almost a century-old decision, the Court has left no doubt that it frowns on such
unsporting practice. The rule is settled that a question of jurisdiction, as here, may be raised at any time,
even on appeal, provided its application does not result in a mockery of the basic tenets of fair
play.43 Petitioner’s action at the later stages of the proceedings below, doubtless taken upon counsel’s
advice, is less than fair and constitutes censurable conduct. Lawyers and litigants must be brought to
account for their improper conduct, which trenches on the efficient dispensation of justice.

WHEREFORE, the petition is DISMISSED for lack of merit. Petitioner Yahya "Jerry" Tomawis and Atty.
Edgar A. Masorong are ADMONISHED to refrain from engaging in activities tending to frustrate the orderly
and speedy administration of justice, with a warning that repetition of the same or similar acts may result in
the imposition of a more severe sanction.

9. VIVENCIO B. VILLAGRACIA, Petitioner, vs. FIFTH (5th) SHARI'A DISTRICT COURT and ROLDAN
E. MALA, represented by his father Hadji Kalam T. Mala, Respondents.

Shari' a District Courts have no jurisdiction over real actions where one of the parties is not a Muslim.

This is a petition for certiorari with application for issuance of temporary restraining order and/or preliminary
injunction to set aside the Fifth (5th) Shari'a District Court's decision1 dated June 11, 2008 and order2 dated
May 29, 2009 in SDC Special Proceedings Case No. 07-200.

The facts as established from the pleadings of the parties are as follows:

On February 15, 1996, Roldan E. Mala purchased a 300-square-meter parcel of land located in Poblacion,
Parang, Maguindanao, now Shariff Kabunsuan, from one Ceres Cañete. On March 3, 1996, Transfer
Certificate of Title No. T-15633 covering the parcel of land was issued in Roldan’s name.3 At the time of the
purchase, Vivencio B. Villagracia occupied the parcel of land. 4
By 2002, Vivencio secured a Katibayan ng Orihinal na Titulo Blg. P-60192 issued by the Land Registration
Authority allegedly covering the same parcel of land.5

On October 30, 2006, Roldan had the parcel of land surveyed. In a report, Geodetic Engineer Dennis P.
Dacup found that Vivencio occupied the parcel of land covered by Roldan’s certificate of title.6

To settle his conflicting claim with Vivencio, Roldan initiated barangay conciliation proceedings before the
Office of the Barangay Chairman of Poblacion II, Parang, Shariff Kabunsuan. Failing to settle with Vivencio
at the barangay level, Roldan filed an action to recover the possession of the parcel of land with respondent
Fifth Shari’a District Court.7

In his petition, Roldan alleged that he is a Filipino Muslim; that he is the registered owner of the lot covered
by Transfer Certificate of Title No. 15633; and that Vivencio occupied his property, depriving him of the right
to use, possess, and enjoy it. He prayed that respondent Fifth Shari’a District Court order Vivencio to vacate
his property.8

Respondent court took cognizance of the case and caused service of summons on Vivencio. However,
despite service of summons, Vivencio failed to file his answer. Thus, Roldan moved that he be allowed to
present evidence ex parte, which motion respondent Fifth Shari’a District Court granted in its order 9 dated
January 30, 2008.10

In its decision11 dated June 11, 2008, respondent Fifth Shari’a District Court ruled that Roldan, as registered
owner, had the better right to possess the parcel of land. It ordered Vivencio to vacate the property, turn it
over to Roldan, and pay ₱10,000.00 as moderate damages and ₱5,000.00 as attorney’s fees.

On December 15, 2008, respondent Fifth Shari’a Distict Court issued the notice of writ of execution12 to
Vivencio, giving him 30 days from receipt of the notice to comply with the decision. He received a copy of
the notice on December 16, 2008.13

On January 13, 2009, Vivencio filed a petition for relief from judgment with prayer for issuance of writ of
preliminary injunction.14 In his petition for relief from judgment, Vivencio cited Article 155, paragraph (2) of
the Code of Muslim Personal Laws of the Philippines 15 and argued that Shari’a District Courts may only
hear civil actions and proceedings if both parties are Muslims. Considering that he is a Christian, Vivencio
argued that respondent Fifth Shari’a District Court had no jurisdiction to take cognizance of Roldan’s action
for recovery of possession of a parcel of land. He prayed that respondent Fifth Shari’a District Court set
aside the decision dated June 11, 2008 on the ground of mistake.16

Respondent Fifth Shari’a District Court ruled that Vivencio "intentionally [waived] his right to defend
himself."17 It noted that he was duly served with summons and had notice of the following: Roldan’s motion
to present evidence ex parte, respondent Fifth Shari’a District Court’s decision dated June 11, 2008, and
the writ of execution. However, Vivencio only went to court "when he lost his right to assail the decision via
certiorari."18

According to respondent Fifth Shari’a District Court, Vivencio cited the wrong provision of law. Article 155,
paragraph (2) of the Code of Muslim Personal Laws of the Philippines refers to the jurisdiction of Shari’a
Circuit Courts, not of Shari’a District Courts.19 It ruled that it had jurisdiction over Roldan’s action for
recovery of possession. Regardless of Vivencio being a non-Muslim, his rights were not prejudiced since
respondent Fifth Shari’a District Court decided the case applying the provisions of the Civil Code of the
Philippines.20

Thus, in its order21 dated May 29, 2009, respondent Fifth Shari’a District Court denied Vivencio’s petition
for relief from judgment for lack of merit. It reiterated its order directing the issuance of a writ of execution
of the decision dated June 11, 2008.
Vivencio received a copy of the order denying his petition for relief from judgment on June 17, 2009. 22

On August 6, 2009, Vivencio filed the petition for certiorari with prayer for issuance of temporary restraining
order with this court.23

In his petition for certiorari, Vivencio argued that respondent Fifth Shari’a District Court acted without
jurisdiction in rendering the decision dated June 11, 2008. Under Article 143, paragraph (2)(b) of the Code
of Muslim Personal Laws of the Philippines,24 Shari’a District Courts may only take cognizance of real
actions where the parties involved are Muslims. Reiterating that he is not a Muslim, Vivencio argued that
respondent Fifth Shari’a District Court had no jurisdiction over the subject matter of Roldan’s action. Thus,
all the proceedings before respondent Fifth Shari’a District Court, including the decision dated June 11,
2008, are void.25

In the resolution26 dated August 19, 2009, this court ordered Roldan to comment on Vivencio’s petition for
certiorari. This court subsequently issued a temporary restraining order enjoining the implementation of the
writ of execution against Vivencio.27

On September 21, 2011, Roldan filed his comment28 on the petition for certiorari. He allegedly filed the
action for recovery of possession with the Shari’a District Court where "a more speedy disposition of the
case would be obtained":29

1. That SDC Spl. Case No. 07-200 (Quieting of Title…) was duly filed with the Fifth (5th) Shariah
District Court, Cotabato City at the option of herein private respondent (petitioner below) who
believed that a more speedy disposition of the case would be obtained when the action is filed with
the Shariah District Court than in the Regional Trial Courts considering the voluminous pending
cases at the Regional Trial Courts[.]30

On Vivencio’s claim that respondent Fifth Shari’a District Court had no jurisdiction to decide the
action for recovery of possession because he is a non-Muslim, Roldan argued that no provision in
the Code of Muslim Personal Laws of the Philippines prohibited non-Muslims from participating in
Shari’a court proceedings, especially in actions where the Shari’a court applied the provisions of
the Civil Code of the Philippines. Thus, respondent Fifth Shari’a District Court validly took
cognizance of his action:

2. That the Shariah District Court is not a court exclusively for muslim litigants. No provision in the
Code on Muslim Personal Laws which expressly prohibits non-muslim to participate in the
proceedings in the Shariah Courts, especially in actions which applies the civil code and not the
Code on Muslim Personal Laws;

3. The Shariah District Courts has jurisdiction over action for quieting of title filed by a muslim litigant
since the nature of the action involved mere removal of cloud of doubt upon one’s Certificate of
Title. The laws applied in this case is the Civil Code and other related laws, and not the Code on
Muslim Personal Laws[.]31

Since respondent Fifth Shari’a District Court had jurisdiction to decide the action for recovery of
possession, Roldan argued that the proceedings before it were valid. Respondent Fifth Shari’a
District Court acquired jurisdiction over the person of Vivencio upon service on him of summons.
When Vivencio failed to file his answer, he "effectively waived his right to participate in the
proceedings [before the Fifth Shari’a District Court]"32 and he cannot argue that his rights were
prejudiced:

4. That it is not disputed that herein petitioner (respondent below) was properly served with
summons, notices and other court processes when the SDC Spl. Case No. 07-200 was filed and
heard in the Fifth (5th) Shariah District Court, Cotabato City, but petitioner (respondent below)
intentionally or without known reason, ignore the proceedings;

5. That the main issue in the instant action for certiorari is whether or not herein petitioner
(respondent below) has effectively waived his right to participate in the proceedings below and had
lost his right to appeal via Certiorari; and the issue on whether or not the Fifth (5th) Shariah District
Court has jurisdiction over an action where one of the parties is a non-muslim;

6. That the Fifth (5th) Shariah District Court, Cotabato City acquired jurisdiction over the case and
that the same Court had correctly ruled that herein petitioner (respondent) intentionally waived his
right to defend himself including his right to appeal via certiorari;

7. That it is humbly submitted that when the Shariah District Court took cognizance of an action
under its concurrent jurisdiction with the Regional Trial Court, the law rules applied is not the Code
on Muslim Personal Laws but the Civil Code of the Philippines and the Revised Rules of Procedure,
hence the same would not prejudice the right of herein petitioner (respondent below)[.] 33

In the resolution dated November 21, 2011, this court ordered Vivencio to reply to Roldan’s comment. On
February 3, 2012, Vivencio filed his manifestation,34 stating that he would no longer file a reply to the
comment as he had "exhaustively discussed the issue presented for resolution in [his petition for
certiorari]."35

The principal issue for our resolution is whether a Shari’a District Court has jurisdiction over a real action
where one of the parties is not a Muslim.

We also resolve the following issues:

1. Whether a Shari’a District Court may validly hear, try, and decide a real action where one of the
parties is a non-Muslim if the District Court decides the action applying the provisions of the Civil
Code of the Philippines; and

2. Whether a Shari’a District Court may validly hear, try, and decide a real action filed by a Muslim
against a non-Muslim if the non-Muslim defendant was served with summons.

We rule for petitioner Vivencio.

Respondent Fifth Shari’a District


Court had no jurisdiction to hear, try,
and decide Roldan’s action for
recovery of possession

Jurisdiction over the subject matter is "the power to hear and determine cases of the general class to which
the proceedings in question belong."36 This power is conferred by law,37 which may either be the
Constitution or a statute. Since subject matter jurisdiction is a matter of law, parties cannot choose, consent
to, or agree as to what court or tribunal should decide their disputes.38 If a court hears, tries, and decides
an action in which it has no jurisdiction, all its proceedings, including the judgment rendered, are void.39

To determine whether a court has jurisdiction over the subject matter of the action, the material allegations
of the complaint and the character of the relief sought are examined.40
The law conferring the jurisdiction of Shari’a District Courts is the Code of the Muslim Personal Laws of the
Philippines. Under Article 143 of the Muslim Code, Shari’a District Courts have concurrent original
jurisdiction with "existing civil courts" over real actions not arising from customary contracts 41 wherein the
parties involved are Muslims:

ART 143. Original jurisdiction. – x x x x

(2) Concurrently with existing civil courts, the Shari’a District Court shall have original jurisdiction over:

xxxx

(b) All other personal and real actions not mentioned in paragraph 1(d)42 wherein the parties involved are
Muslims except those for forcible entry and unlawful detainer, which shall fall under the exclusive original
jurisdiction of the Municipal Circuit Court; and

xxxx

When ownership is acquired over a particular property, the owner has the right to possess and enjoy it. 43 If
the owner is dispossessed of his or her property, he or she has a right of action to recover its possession
from the dispossessor.44 When the property involved is real,45 such as land, the action to recover it is a real
action;46otherwise, the action is a personal action.47 In such actions, the parties involved must be Muslims
for Shari’a District Courts to validly take cognizance of them.

In this case, the allegations in Roldan’s petition for recovery of possession did not state that Vivencio is a
Muslim. When Vivencio stated in his petition for relief from judgment that he is not a Muslim, Roldan did not
dispute this claim.

When it became apparent that Vivencio is not a Muslim, respondent Fifth Shari’a District Court should have
motu proprio dismissed the case. Under Rule 9, Section 1 of the Rules of Court, if it appears that the court
has no jurisdiction over the subject matter of the action based on the pleadings or the evidence on record,
the court shall dismiss the claim:

Section 1. Defenses and objections not pleaded. – Defenses and objections not pleaded either in a motion
to dismiss or in the answer are deemed waived. However, when it appears from the pleadings or the
evidence on record that the court has no jurisdiction over the subject matter, that there is another action
pending between the same parties for the same cause, or that the action is barred by a prior judgment or
by statute of limitations, the court shall dismiss the claim.

Respondent Fifth Shari’a District Court had no authority under the law to decide Roldan’s action because
not all of the parties involved in the action are Muslims. Thus, it had no jurisdiction over Roldan’s action for
recovery of possession. All its proceedings in SDC Special Proceedings Case No. 07-200 are void.

Roldan chose to file his action with the Shari’a District Court, instead of filing the action with the regular
courts, to obtain "a more speedy disposition of the case."48 This would have been a valid argument had all
the parties involved in this case been Muslims. Under Article 143 of the Muslim Code, the jurisdiction
of Shari’a District Courts over real actions not arising from customary contracts is concurrent with
that of existing civil courts. However, this concurrent jurisdiction over real actions "is applicable
solely when both parties are Muslims"49 as this court ruled in Tomawis v. Hon. Balindong. 50 When one
of the parties is not a Muslim, the action must be filed before the regular courts.

The application of the provisions of the Civil Code of the Philippines by respondent Fifth Shari’a District
Court does not validate the proceedings before the court. Under Article 175 of the Muslim Code, customary
contracts are construed in accordance with Muslim law.51 Hence, Shari’a District Courts apply Muslim law
when resolving real actions arising from customary contracts.

In real actions not arising from contracts customary to Muslims, there is no reason for Shari’a
District Courts to apply Muslim law. In such real actions, Shari’a District Courts will necessarily
apply the laws of general application, which in this case is the Civil Code of the Philippines,
regardless of the court taking cognizance of the action. This is the reason why the original
jurisdiction of Shari’a District Courts over real actions not arising from customary contracts is
concurrent with that of regular courts.

However, as discussed, this concurrent jurisdiction arises only if the parties involved are Muslims.
Considering that Vivencio is not a Muslim, respondent Fifth Shari’a District Court had no jurisdiction over
Roldan’s action for recovery of possession of real property. The proceedings before it are void, regardless
of the fact that it applied the provisions of the Civil Code of the Philippines in resolving the action.

True, no provision in the Code of Muslim Personal Laws of the Philippines expressly prohibits non-Muslims
from participating in Shari’a court proceedings. In fact, there are instances when provisions in the Muslim
Code apply to non-Muslims. Under Article 13 of the Muslim Code,52 provisions of the Code on marriage
and divorce apply to the female party in a marriage solemnized according to Muslim law, even if the female
is non-Muslim.53 Under Article 93, paragraph (c) of the Muslim Code,54 a person of a different religion is
disqualified from inheriting from a Muslim decedent.55 However, by operation of law and regardless of
Muslim law to the contrary, the decedent’s parent or spouse who is a non-Muslim "shall be entitled to one-
third of what he or she would have received without such disqualification."56 In these instances, non-
Muslims may participate in Shari’a court proceedings.57

Nonetheless, this case does not involve any of the previously cited instances. This case involves an action
for recovery of possession of real property. As a matter of law, Shari’a District Courts may only take
cognizance of a real action "wherein the parties involved are Muslims."58 Considering that one of the
parties involved in this case is not a Muslim, respondent Fifth Shari’a District Court had no
jurisdiction to hear, try, and decide the action for recovery of possession of real property. The
judgment against Vivencio is void for respondent Fifth Shari’a District Court’s lack of jurisdiction
over the subject matter of the action.

That Vivencio raised the issue of lack of jurisdiction over the subject matter only after respondent Fifth
Shari’a District Court had rendered judgment is immaterial. A party may assail the jurisdiction of a court or
tribunal over a subject matter at any stage of the proceedings, even on appeal.59 The reason is that
"jurisdiction is conferred by law, and lack of it affects the very authority of the court to take cognizance of
and to render judgment on the action."60

In Figueroa v. People of the Philippines,61 Venancio Figueroa was charged with reckless imprudence
resulting in homicide before the Regional Trial Court of Bulacan. The trial court convicted Figueroa as
charged. On appeal with the Court of Appeals, Figueroa raised for the first time the issue of jurisdiction of
the Regional Trial Court to decide the case. Ruling that the Regional Trial Court had no jurisdiction over the
crime charged, this court dismissed the criminal case despite the fact that Figueroa objected to the trial
court’s jurisdiction only on appeal.

In Metromedia Times Corporation v. Pastorin,62 Johnny Pastorin filed a complaint for constructive dismissal
against Metromedia Times Corporation. Metromedia Times Corporation actively participated in the
proceedings before the Labor Arbiter. When the Labor Arbiter ruled against Metromedia Times, it appealed
to the National Labor Relations Commission, arguing for the first time that the Labor Arbiter had no
jurisdiction over the complaint. According to Metromedia Times, the case involved a grievance issue
"properly cognizable by the voluntary arbitrator."63 This court set aside the decision of the Labor Arbiter on
the ground of lack of jurisdiction over the subject matter despite the fact that the issue of jurisdiction was
raised only on appeal.
There are exceptional circumstances when a party may be barred from assailing the jurisdiction of the court
to decide a case. In the 1968 case of Tijam v. Sibonghanoy, 64 the Spouses Tijam sued the Spouses
Sibonghanoy on July 19, 1948 before the Court of First Instance of Cebu to recover ₱1,908.00. At that time,
the court with exclusive original jurisdiction to hear civil actions in which the amount demanded does not
exceed ₱2,000.00 was the court of justices of the peace and municipal courts in chartered cities under
Section 88 of the Judiciary Act of 1948.

As prayed for by the Spouses Tijam in their complaint, the Court of First Instance issued a writ of attachment
against the Spouses Sibonghanoy. However, the latter filed a counter-bond issued by Manila Surety and
Fidelity Co., Inc. Thus, the Court of First Instance dissolved the writ of attachment.

After trial, the Court of First Instance decided in favor of the Spouses Tijam. When the writ of execution
returned unsatisfied, the Spouses Tijam moved for the issuance of a writ of execution against Manila Surety
and Fidelity Co., Inc.’s bond. The Court of First Instance granted the motion. Manila Surety and Fidelity Co.,
Inc. moved to quash the writ of execution, which motion the Court of First Instance denied. Thus, the surety
company appealed to the Court of Appeals.

The Court of Appeals sustained the Court of First Instance’s decision. Five days after receiving the Court
of Appeals’ decision, Manila Surety and Fidelity Co., Inc. filed a motion to dismiss, arguing for the first time
that the Court of First Instance had no jurisdiction over the subject matter of the case. The Court of Appeals
forwarded the case to this court for resolution.

This court ruled that the surety company could no longer assail the jurisdiction of the Court of First Instance
on the ground of estoppel by laches. Parties may be barred from assailing the jurisdiction of the court
over the subject matter of the action if it took them an unreasonable and unexplained length of time
to object to the court’s jurisdiction.65 This is to discourage the deliberate practice of parties in
invoking the jurisdiction of a court to seek affirmative relief, only to repudiate the court’s jurisdiction
after failing to obtain the relief sought.66 In such cases, the court’s lack of jurisdiction over the subject
matter is overlooked in favor of the public policy of discouraging such inequitable and unfair conduct. 67

In Tijam, it took Manila Surety and Fidelity Co., Inc. 15 years before assailing the jurisdiction of the Court
of First Instance. As early as 1948, the surety company became a party to the case when it issued the
counter-bond to the writ of attachment. During trial, it invoked the jurisdiction of the Court of First Instance
by seeking several affirmative reliefs, including a motion to quash the writ of execution. The surety company
only assailed the jurisdiction of the Court of First Instance in 1963 when the Court of Appeals affirmed the
lower court’s decision. This court said:

x x x x Were we to sanction such conduct on [Manila Surety and Fidelity, Co. Inc.’s] part, We would in effect
be declaring as useless all the proceedings had in the present case since it was commenced on July 19,
1948 and compel [the spouses Tijam] to go up their Calvary once more.

The inequity and unfairness of this is not only patent but revolting. 68

After this court had rendered the decision in Tijam, this court observed that the "non-waivability of objection
to jurisdiction"69 has been ignored, and the Tijam doctrine has become more the general rule than the
exception.

In Calimlim v. Ramirez,70 this court said:

A rule that had been settled by unquestioned acceptance and upheld in decisions so numerous to cite is
that the jurisdiction of a court over the subject-matter of the action is a matter of law and may not be
conferred by consent or agreement of the parties. The lack of jurisdiction of a court may be raised at any
stage of the proceedings, even on appeal. This doctrine has been qualified by recent pronouncements
which stemmed principally from the ruling in the cited case of [Tijam v. Sibonghanoy]. It is to be regretted,
however, that the holding in said case had been applied to situations which were obviously not
contemplated therein. x x x.71

Thus, the court reiterated the "unquestionably accepted"72 rule that objections to a court’s jurisdiction over
the subject matter may be raised at any stage of the proceedings, even on appeal. This is because
jurisdiction over the subject matter is a "matter of law"73 and "may not be conferred by consent or agreement
of the parties."74

In Figueroa,75 this court ruled that the Tijam doctrine "must be applied with great care;" 76 otherwise, the
doctrine "may be a most effective weapon for the accomplishment of injustice": 77

x x x estoppel, being in the nature of a forfeiture, is not favored by law. It is to be applied rarely — only from
necessity, and only in extraordinary circumstances. The doctrine must be applied with great care and the
equity must be strong in its favor. When misapplied, the doctrine of estoppel may be a most effective
weapon for the accomplishment of injustice. x x x a judgment rendered without jurisdiction over the subject
matter is void. x x x. No laches will even attach when the judgment is null and void for want of jurisdiction x
x x.78

In this case, the exceptional circumstances similar to Tijam do not exist. Vivencio never invoked respondent
Fifth Shari’a District Court’s jurisdiction to seek affirmative relief. He filed the petition for relief from judgment
precisely to assail the jurisdiction of respondent Fifth Shari’a District Court over Roldan’s petition for
recovery of possession.

Thus, the general rule holds. Vivencio validly assailed the jurisdiction of respondent Fifth Shari’a District
Court over the action for recovery of possession for lack of jurisdiction over the subject matter of Roldan’s
action.

II

That respondent Fifth Shari’a


District Court served summons on
petitioner Vivencio did not vest it
with jurisdiction over the person of
petitioner Vivencio

Roldan argued that the proceedings before respondent Shari’a District Court were valid since the latter
acquired jurisdiction over the person of Vivencio. When Vivencio was served with summons, he failed to
file his answer and waived his right to participate in the proceedings before respondent Fifth Shari’a District
Court. Since Vivencio waived his right to participate in the proceedings, he cannot argue that his rights were
prejudiced.

Jurisdiction over the person is "the power of [a] court to render a personal judgment or to subject
the parties in a particular action to the judgment and other rulings rendered in the action."79 A court
acquires jurisdiction over the person of the plaintiff once he or she files the initiatory pleading. 80 As
for the defendant, the court acquires jurisdiction over his or her person either by his or her voluntary
appearance in court81 or a valid service on him or her of summons.82

Jurisdiction over the person is required in actions in personam 83 or actions based on a party’s personal
liability.84Since actions in personam "are directed against specific persons and seek personal
judgments,"85 it is necessary that the parties to the action "are properly impleaded and duly heard or given
an opportunity to be heard."86 With respect to the defendant, he or she must have been duly served with
summons to be considered properly impleaded; otherwise, the proceedings in personam, including the
judgment rendered, are void.87
On the other hand, jurisdiction over the person is not necessary for a court to validly try and decide actions
in rem.88Actions in rem are "directed against the thing or property or status of a person and seek judgments
with respect thereto as against the whole world."89 In actions in rem, the court trying the case must have
jurisdiction over the res, or the thing under litigation, to validly try and decide the case. Jurisdiction over the
res is acquired either "by the seizure of the property under legal process, whereby it is brought into actual
custody of the law; or as a result of the institution of legal proceedings, in which the power of the court is
recognized and made effective."90 In actions in rem, summons must still be served on the defendant but
only to satisfy due process requirements.91

Unlike objections to jurisdiction over the subject matter which may be raised at any stage of the
proceedings, objections to jurisdiction over the person of the defendant must be raised at the
earliest possible opportunity; otherwise, the objection to the court’s jurisdiction over the person of the
defendant is deemed waived. Under Rule 9, Section 1 of the Rules of Court, "defenses and objections not
pleaded either in a motion to dismiss or in the answer are deemed waived."

In this case, Roldan sought to enforce a personal obligation on Vivencio to vacate his property, restore to
him the possession of his property, and pay damages for the unauthorized use of his property.92 Thus,
Roldan’s action for recovery of possession is an action in personam. As this court explained in Ang Lam v.
Rosillosa and Santiago,93 an action to recover the title to or possession of a parcel of land "is an action in
personam, for it binds a particular individual only although it concerns the right to a tangible thing."94 Also,
in Muñoz v. Yabut, Jr.,95 this court said that "a judgment directing a party to deliver possession of a property
to another is in personam. It is binding only against the parties and their successors-in-interest by title
subsequent to the commencement of the action."96

This action being in personam, service of summons on Vivencio was necessary for respondent Fifth Shari’a
District Court to acquire jurisdiction over Vivencio’s person.

However, as discussed, respondent Fifth Shari’a District Court has no jurisdiction over the subject matter
of the action, with Vivencio not being a Muslim. Therefore, all the proceedings before respondent Shari’a
District Court, including the service of summons on Vivencio, are void.

III

The Shari’a Appellate Court and the


Office of the Jurisconsult in Islamic
law must now be organized to
effectively enforce the Muslim legal
system in the Philippines

We note that Vivencio filed directly with this court his petition for certiorari of respondent Fifth Shari’a District
Court’s decision. Under the judicial system in Republic Act No. 9054, 97 the Shari’a Appellate Court has
exclusive original jurisdiction over petitions for certiorari of decisions of the Shari’a District Courts. He should
have filed his petition for certiorari before the Shari’a Appellate Court.

However, the Shari’a Appellate Court is yet to be organized. Thus, we call for the organization of the court
system created under Republic Act No. 9054 to effectively enforce the Muslim legal system in our country.
After all, the Muslim legal system – a legal system complete with its own civil, criminal, commercial, political,
international, and religious laws98 – is part of the law of the land,99 and Shari’a courts are part of the
Philippine judicial system.100

Shari’a Circuit Courts and Shari’a District Courts created under the Code of Muslim Personal Laws of the
Philippines shall continue to discharge their duties.101 All cases tried in Shari’a Circuit Courts shall be
appealable to Shari’a District Courts.[[102]
The Shari’a Appellate Court created under Republic Act No. 9054 shall exercise appellate jurisdiction over
all cases tried in the Shari’a District Courts.103 It shall also exercise original jurisdiction over petitions for
certiorari, prohibition, mandamus, habeas corpus, and other auxiliary writs and processes in aid of its
appellate jurisdiction.104 The decisions of the Shari’a Appellate Court shall be final and executory, without
prejudice to the original and appellate jurisdiction of this court.105

This court held in Tomawis v. Hon. Balindong106 that "until such time that the Shari’a Appellate Court shall
have been organized,"107 decisions of the Shari’a District Court shall be appealable to the Court of Appeals
and "shall be referred to a Special Division to be organized in any of the [Court of Appeals] stations
preferably composed of Muslim [Court of Appeals] Justices."108 However, considering that To m a w i s was
not yet promulgated when Vivencio filed his petition for certiorari on August 6, 2009, we take cognizance
of Vivencio’s petition for certiorari in the exercise of our original jurisdiction over petitions for certiorari. 109

Moreover, priority should be given in organizing the Office of the Jurisconsult in Islamic law. A Jurisconsult
in Islamic law or "Mufti" is an officer with authority to render legal opinions or "fatawa"110 on any questions
relating to Muslim law.111 These legal opinions should be based on recognized authorities 112 and "must be
rendered in precise accordance with precedent."113 In the Philippines where only Muslim personal laws are
codified, a legal officer learned in the Qur’an and Hadiths is necessary to assist this court as well as Shari’a
court judges in resolving disputes not involving Muslim personal laws.

All told, Shari’a District Courts have jurisdiction over a real action only when the parties involved are
Muslims. Respondent Fifth Shari’a District Court acted without jurisdiction in taking cognizance of Roldan
E. Mala’s action for recovery of possession considering that Vivencio B. Villagracia is not a Muslim.
Accordingly, the proceedings in SDC Special Proceedings Case No. 07-200, including the judgment
rendered, are void.

WHEREFORE, the petition for certiorari is GRANTED. Respondent Fifth Shari’a District Court’s decision
dated June 11, 2008 and order dated May 29, 2009 in SDC Special Proceedings Case No. 07-200 are SET
ASIDE without prejudice to the filing of respondent Roldan E. Mala of an action with the proper court.

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